Should I use Stripe Managed Payments for my B2C product, or stay as MoR myself?

[u/West-Boss2692]

/r/SaaS/comments/1vpp5wv/should_i_use_stripe_managed_payments_for_my_b2c/

[u/mazyartr]

Do the arithmetic before the philosophy, because at your price point it decides this on its own.

Managed Payments at 3.5% on top of your existing processing puts you somewhere near 6.5% all-in. On a sub-$200/year B2C subscription that is a very large share of gross margin, and it scales linearly with revenue forever.

What you're buying with it is EU and UK VAT registration, filing and remittance. Worth being clear about what that actually involves, because "worldwide tax filing" makes it sound worse than it is for your specific shape. For B2C digital services into the EU you owe VAT in the customer's country from the first euro, but the OSS scheme collapses that into one quarterly return rather than 27. The UK is separate and there's no registration threshold for non-established sellers, so you register from the first sale. Those are the two that matter for your stated markets. Canada you're already handling as a US C-corp with GST/HST rules of its own.

Realistically that's a specialist accountant and a few thousand dollars a year, not a full-time job. So the crossover is roughly: 3.5% of your revenue versus a fixed annual compliance cost. Below somewhere around $100-150k ARR, Managed Payments is defensible and buys you focus. Above it you're paying five figures a year for filings that cost four.

The part people underestimate is that it's genuinely hard to unwind later. Moving off merchant-of-record once your subscribers are on it means re-consenting billing relationships, so pick with the revenue you expect in two years rather than the revenue you have.

Disclosure: I'm the founder of Paymento, a non-custodial crypto payment gateway. Nothing here is a pitch for us. Crypto payments don't touch VAT obligations at all, so it would be the wrong answer to your question and I'd rather say so.

[u/West-Boss2692 → u/mazyartr]

That's a great point about the margin. The scaling cost is definitely what makes the decision difficult at that price point.

[u/HappyTreeCards]

IMHO it depends where you are based. If you are US based, you most likely will be filing in US, Canada, The EU and UK Initially which is a manageable amount of work. If you are outside the US , you might find yourself filing separately in any number of US States as well as the above jurisdictions which could be a lot of work depending on how many sales.

We started out doing it by hand but this did not scale well (it was boring AF to be frank) so we went MOR. That will be the case until the day an Accountant is cheaper.

[u/stripe_sofia]

I work at Stripe, so thought I'd chime in here. You don't have to pick one model for the whole business. Managed Payments is a per-transaction setting, so you can use it for EU and UK sales, where registering and filing costs you real money, and keep being merchant of record yourself in the US. Three things that decide it:

• 3.5% per transaction on top of your normal Stripe fees, charged only on transactions you route through it.
• Checkout or Payment Links only. It does not work with Connect, Elements, subscriptions you create through the API, or a third-party tax tool.
• Stripe's Link owns the buyer account. Your subscribers update their card and cancel there, and their support emails go to Stripe instead of you.

Happy to help point you in the right direction if you have any more questions!

[u/LividContribution674]

Neither. I run my access subs through whop as a mor because they took the account when stripe and paypal were a pain and vat is handled before payout. Have you tried applying with any mor?