Intro #
Every payment decision you make today has long-term consequences — and they're worse than you think. Choosing wrong doesn't just mean a clunky checkout. It means overpaying on fees, losing customers to failed transactions, and drowning in global tax compliance. Most startups pick one "good enough" solution and never look back. Until they scale, and "good enough" becomes a structural crisis.
This guide is designed to help you navigate the payment landscape and find the ideal infrastructure for your needs. Not sure where to start? Find your path based on your situation:
- Creator or Author selling digital products → Creator Platforms or Merchants of Record
- Solo Developer or Indie Hacker launching a SaaS → Merchants of Record
- Small Business or Startup needing simple payments → Gateways & Processors
- E-commerce Shop selling physical goods → BNPL + Gateways
- B2B with High-Ticket Invoices → Direct Debit & Open Banking
- Enterprise with Complex Pricing or multiple plans → Orchestration & Billing
- Platform Paying Out to Many (creators, affiliates) → Mass Payments & Card Issuing
- Cross-Border or High-Risk Business → Crypto Payment Gateways
Money often costs too much.
Ralph Waldo Emerson
Glossary10 terms
- AML: Anti-Money Laundering — regulations to prevent disguising illegal funds.
- AOV: Average Order Value — the average amount spent per transaction.
- B2B: Business-to-Business — sales between companies.
- B2C: Business-to-Consumer — sales directly to individual customers.
- Chargeback: When a customer disputes a transaction with their bank, forcing a refund plus penalty fee.
- Churn: The rate at which customers cancel their subscriptions.
- Dunning: The automated process of retrying failed payments to reduce involuntary churn.
- Gateway: A payment processor that handles the technical infrastructure for accepting payments.
- KYC: Know Your Customer — identity verification to prevent fraud.
- MoR: Merchant of Record — a third party that legally acts as the seller, handling taxes and compliance on your behalf.
Gateways & Processors #
Gateways are the heart of the system. You get more control, but you also inherit the "hard points" of the business — taxes, compliance, and security. It's like driving a manual car: you're in total command, but you have to work the clutch yourself.
When you think about taking payments for your business, household names like Stripeor Braintreeare likely the first to come to mind. These are the industry standards, known for being reliable and offering "plug-and-play" setups that can get you running in just a few clicks.
It seems like an obvious choice: why look for anything else when these solutions work so well? However, there is a hidden catch. Because these gateways focus on keeping things simple, they often leave out advanced features. This gap in the market is actually why a whole new category of software — Orchestration & Billing solutions — was created. When you connect directly to a gateway, you quickly realize that the basic "out-of-the-box" service doesn't cover everything a growing business needs.
The Pros
- All-in-one: Gateways usually handle many different payment types (credit cards, digital wallets, etc.) in one place.
- Simplified Tech: They handle the "heavy lifting" of money processing while still giving you control over the checkout experience.
- Helpful Add-ons: Many offer built-in tools for things like calculating sales tax.
The Cons
- Basic Logic: If your pricing model is complex, you'll likely have to build the logic to handle it yourself.
- Security Risks: High-end fraud protection isn't always turned on by default, and their basic built-in tools aren't always the most effective.
- Red Tape: Your business will frequently have to pass strict "Know Your Customer" (KYC) and Anti-Money Laundering (AML) background checks.
When to choose: Use a gateway directly if your business has a simple pricing structure and you are comfortable managing your own financial reporting and accounting. Just be sure to have a solid plan for fraud prevention — you might even need to look into a separate security service to stay safe.
Popular Solutions
- Stripe— The go-to for startups. Clean API, extensive docs, and a massive ecosystem of integrations.
- Braintree— PayPal-owned, strong on mobile SDKs and PayPal/Venmo integration.
- Adyen— Enterprise-grade with unified commerce across online, in-store, and mobile.
- Checkout.com— High-growth focus with intelligent payment routing and local acquiring.
Merchants of Record (MoR) #
Think of an MoR as a complete outsourcing of your back office. They don't just process money; they act as the legal bridge between you and the customer, handling the messy reality of global tax compliance. While this means you are "bound" to their ecosystem, the trade-off is massive: you focus on building, while they handle the red tape. For B2C startups, it's a lifesaver.
Selling globally means filing taxes globally. Every country has its own rules, forms, and deadlines. Some require a local representative before you can sell at all. It's a lot — especially when you'd rather be building your product.
This is where a Merchant of Record (MoR) comes in. They act as a "reseller" of your product. Instead of you selling directly to the customer, you sell the product to the MoR, and they sell it to the customer. They handle the payments, global taxes, and financial paperwork under their name. While this is incredibly convenient, it comes with specific tradeoffs.
The Pros
- Zero Tax Stress: You can stop worrying about global tax laws. The MoR handles all the calculations, filings, and legal liability, letting you focus entirely on building your product.
- Better Security: Their fraud protection is usually more robust than a standard gateway because they are the ones legally responsible for any "bad" transactions.
- Instant Trust: Using a well-known MoR can make your checkout feel more professional and secure to customers who might not know your brand yet.
The Cons
- Migration Pain: You don't own the card vault. Moving 10k subscribers to another provider later means asking customers to re-enter cards — expect 5-10% churn. This is the single biggest long-term risk for scaling SaaS.
- Branding Issues: When your customers look at their bank statements, they will see the MoR's name (like "Paddle") instead of your company's name, which can sometimes be confusing.
- Costly at Scale: A 5-8% fee feels small when you're starting out, but as your revenue grows into the millions, that percentage becomes a very large sum of money.
When to choose: Perfect for solo founders and small teams selling digital products. You trade higher fees for zero tax headaches.
Popular Solutions
- Paddle— Full MoR for SaaS with subscription management, dunning, and global tax compliance built-in.
- Lemon Squeezy— Modern, creator-friendly MoR with beautiful checkout and simple pricing. Great for indie hackers.
- FastSpring— Enterprise-ready MoR with strong B2B features and localized payment methods worldwide.
Orchestration & Billing #
Orchestration and Billing acts as the "command center" of your payment stack. These solutions allow you to manage complex subscriptions, automate revenue recognition, and route payments across multiple gateways from a single place. Because they sit on top of your existing infrastructure, they typically charge a small percentage or a subscription fee in addition to your gateway costs.
Orchestration software sits on top of your payment gateways (like Stripe or Adyen). These solutions were created because, as a business grows, "simple" gateways often can't keep up with sophisticated needs.
Larger companies quickly realize that managing things like tiered pricing, free trials, pausing subscriptions, or dunning is incredibly difficult to build from scratch. Orchestration platforms handle all that logic for you, acting as the "brain" of your payment system.
The Pros
- Handles the Hard Stuff: They solve massive headaches like complex subscription logic and automated financial reporting, saving your engineers months of work.
- Gateway Flexibility: You aren't locked into one processor. You can switch gateways "on the fly" — for example, using one provider for US customers and another for European customers to get better rates.
- Unified System: You only have to write your code once. If you add a second or third gateway later, you don't have to change your core website integration.
The Cons
- Double Fees: You are paying for this platform in addition to what you already pay your payment gateway. It is the most expensive route.
- Vendor Lock-in: Their systems are very specialized. If you decide to leave a platform like Chargebee, moving all your complex billing data to a competitor is a major project.
- Complexity Bugs: Because these systems try to do so much, they are known for having occasional bugs in their most advanced features.
When to choose: You need complex subscription logic (tiered pricing, usage-based billing, advanced dunning) or want to route payments across multiple gateways for better rates.
Popular Solutions
BNPL (Buy Now, Pay Later) #
BNPL is a win-win: customers pay in installments, and you get the full payment upfront. It turns "maybe later" into "buy now." You'll pay a higher transaction fee, but in exchange, you'll see a significant boost in sales volume and basket size.
Buy Now, Pay Later (BNPL) has exploded in popularity as the go-to way to sell expensive goods online. It allows your customers to split their purchase into smaller installments — usually interest-free — while you, the seller, receive the full amount immediately (minus the fee).
It is important to remember that BNPL is not a replacement for a payment gateway; it is an "add-on" that sits alongside it at checkout. While the fees are higher than a standard credit card swipe (4-6% vs 2-3%), the BNPL provider takes on all the risk. If the customer fails to pay their installments later, you still keep your money.
Popular Solutions
Direct Debit & Open Banking #
When you use a credit card, networks like Visa and Mastercard take a cut of about 3% to process the payment. Open Banking (often called "Pay by Bank") bypasses these networks entirely. It allows your customer to pay you directly from their bank account to yours using secure digital links.
Because there are no "middlemen" like card networks, the fees are significantly lower, making it a favorite for businesses moving large sums of money where a 3% fee would be painful.
The Pros
- Major Cost Savings: By skipping card networks, you keep more of your revenue. On a $10,000 payment, you could save hundreds of dollars in fees.
- Faster Settlement: UK Faster Payments and SEPA Instant arrive in seconds. Standard Direct Debit takes 3-5 days, but you skip the card network delays.
- No Chargebacks: These payments are "push" payments, meaning the customer authorizes them via their own bank app. This makes it much harder for a customer to unfairly "charge back" a payment.
The Cons
- The "90-Day" Friction: In the UK and EU, security rules used to require customers to manually re-verify their bank connection every 90 days. While this process is becoming much smoother (now often just a simple "Yes" click in an app), it can still cause subscriptions to break if the customer forgets.
- Not for Every Business: It works perfectly for one-time big purchases or annual invoices, but it is still more "frictional" for small monthly subscriptions compared to a credit card.
- Bank Reliability: While card networks are incredibly stable, bank APIs can occasionally be "buggy" or slow down, leading to a slightly less consistent experience.
When to choose: You have high-ticket B2B deals or annual plans where 3% credit card fees eat into your margins. On a $50k invoice, that's $1,000 saved (1% vs 3%).
Popular Solutions
- Plaid— The US leader in bank connectivity, powering thousands of fintech apps with account linking and verification.
- GoCardless— Direct Debit specialist with strong UK/EU presence. Great for recurring B2B payments.
- Tink— Now owned by Visa. European Open Banking platform with broad bank coverage.
Crypto Payment Gateways #
Think of Crypto Gateways as the "Satellite Link" of payments. By bypassing traditional banking borders, they allow for instant, peer-to-peer transactions that are settled directly into stable currencies. Provide a secure, irreversible, and low-fee alternative to the legacy financial system.
In the past, cryptocurrency was seen as a "gray area" for payments, but that is changing fast. In 2025, many of the world's biggest payment companies have started supporting stablecoins (digital coins pegged to the US Dollar). This allows businesses to enjoy the speed of crypto without the "rollercoaster" price swings of Bitcoin.
Because crypto operates on a decentralized network, it doesn't rely on traditional banks. This makes it a powerful "plan B" for businesses that have trouble getting approved by traditional banks or for those who need to receive money from international customers instantly.
The Pros
- Low Fees & No Middlemen: You bypass the 3% cut taken by credit card companies.
- No Chargebacks: Once a transaction is confirmed on the blockchain, it cannot be reversed. This is a massive advantage for businesses selling high-value goods like electronics.
- Instant Global Access: You can receive a payment from someone on the other side of the world in minutes, even on weekends when banks are closed.
The Cons
- Complexity & Taxes: To stay "above board," you'll need specialized accounting software to track these digital assets for tax purposes.
- Subscription Hurdles: Most standard crypto setups don't support automatic recurring monthly payments yet. While some advanced "smart contracts" can do this, it's much harder to set up than a credit card.
- Reputation & Trust: Some customers still view crypto with suspicion. Adding a crypto option can look "innovative" to some but "risky" to others, depending on your brand.
When to choose: You sell high-value items (electronics, luxury goods) or have customers in regions where card acceptance is difficult or cross-border fees are high.
Popular Solutions
- BitPay— The veteran of crypto payments. Supports Bitcoin, stablecoins, and auto-converts to fiat.
- Coinbase Commerce— From the largest US crypto exchange. Simple checkout widget with broad coin support.
- Triple-A— Singapore-based, licensed in multiple jurisdictions. Enterprise-focused with white-label options.
- Stripe (via USDC)— The payments giant now supports USDC stablecoin payouts globally.
Creator Platforms #
The "all-in-one" shop for creators. These platforms bundle your landing page, hosting, and checkout into one. Unlike traditional MoRs (Paddle, Lemon Squeezy), they work with personal accounts — no business registration required. Gumroad became a full MoR in 2025, handling all taxes for you. Others (Payhip, Sellfy) provide tax tools but leave compliance to you.
If you are an author or an artist who wants to start selling "right now," this is the fastest way to do it. These platforms allow you to skip the "hard stuff" — you don't need to build a website, configure a checkout, or even register a formal business in some cases. You simply upload your file, set a price, and share the link.
This category is all about removing barriers. They provide a simple "storefront" for your work, handle the file delivery to the customer, and (increasingly) manage global taxes on your behalf.
The Pros
- Instant Start: You can go from "idea" to "first sale" in under ten minutes.
- No Business Needed: Because many of these act as a Merchant of Record, you don't need to be a tax expert or have a complex company structure to sell globally.
- Zero Maintenance: You don't have to worry about software updates, security plugins, or website hosting.
The Cons
- High Fees: You pay for that convenience. A 10% cut (plus credit card fees) can eat up a huge portion of your profit compared to using a direct gateway.
- Borrowed Audience: Like the MoR model, the platform often "owns" the checkout experience. You have very little control over how the page looks or how your brand is presented.
- Limited Payouts: Some platforms may have specific schedules for when they send your money (e.g., weekly), whereas a direct gateway usually pays out every few days.
When to choose: You're a creator who wants to focus on creativity, not tech. Upload, set a price, sell — done.
Popular Solutions
- Gumroad— The original creator platform. Simple 10% flat fee, huge community, and built-in audience discovery.
- Payhip— Lower fees (5% or free with subscription), EU VAT handling, and support for memberships.
- Sellfy— Flat monthly pricing, no transaction fees. Great for print-on-demand and subscriptions.
Mass Payments & Card Issuing #
The "wow" factor of fintech. This category lets you issue branded cards and automate mass payouts to thousands of recipients instantly — think paying out creators, affiliates, or gig workers without manually processing each transfer.
The main tradeoff is complexity. You're essentially becoming a mini-bank, which means dealing with KYC requirements for your recipients and strict regulatory oversight. But if payouts are core to your business model, these platforms remove massive operational headaches.
Popular Solutions
- Stripe Connect— Split payments and pay out to connected accounts. The go-to for marketplaces.
- PayPal Payouts— Mass payments to PayPal accounts globally. Simple but limited to PayPal users.
- Marqeta— Issue your own branded cards. Powers DoorDash, Instacart, and Square Card.
Vault Storage Solutions #
The "lock-breaker" of the payment stack. A Vault is a secure layer that stores card data outside of your primary gateway. It isn't a processor — it's an escape hatch.
Here's the problem vaults solve: when you store customer cards with Stripe, those cards belong to Stripe. Want to switch to Adyen for better European rates? You'd have to ask every customer to re-enter their card. A vault stores card tokens independently, so you can route transactions to any gateway without losing your customers' saved payment methods. It's insurance against vendor lock-in — but only worth it if you're processing enough volume to justify the complexity.
Popular Solutions
- Spreedly— The pioneer. Connects to 100+ gateways with a single integration.
- Pagos— Vault plus payment analytics and optimization tools.
- Basis Theory— Developer-focused, modern API. Good for custom tokenization needs.
Conclusion #
The payment landscape has never been richer — or more confusing. Today, you can accept payments in dozens of ways, from a simple Gumroad link to a multi-gateway enterprise setup with custom revenue recognition.
The right choice comes down to one question: what matters more to you right now — speed or control?
If you need to launch fast and hate paperwork, start with a Merchant of Record or Creator Platform. You'll pay higher fees, but you'll be selling in minutes, not months. As you grow and those fees start to hurt, you can migrate to a direct gateway and take control of your stack.
If you're building enterprise-grade infrastructure from day one, look at Orchestration & Billing platforms combined with Vault Storage. You'll get the flexibility to switch gateways, optimize for regional pricing, and build exactly the billing logic your business needs.
At YetOnePro, we bet against the industry. No tiers. No hidden fees. One flat price. In a market drowning in pricing pages with 47 checkmarks, simplicity is disruptive. We chose Stripe, kept it clean, and never looked back.
Good luck building.
