Why Paddle Rejects New Developers and What Payment Alternatives Exist in 2025
Paddle, a Merchant of Record (MoR) platform, frequently rejects first-time applicants because it assumes full legal liability for sales, making unproven solo developers a high-risk proposition. Common rejection triggers include no prior payment processing history, an incomplete website, identity mismatches between the applicant and domain owner, and restrictions on certain AI-related product categories. Developers who still need MoR benefits — such as automatic VAT/GST remittance across 100-plus jurisdictions — are advised to polish their site, clarify their business model, and reapply, or try alternatives like Lemon Squeezy. Those rejected due to being new rather than non-compliant can consider payment facilitator models, which allow immediate onboarding with transaction caps instead of upfront vetting. Fee structures also differ significantly: Paddle charges 5% plus $0.50 per transaction, which can equate to over 10% on low-value subscriptions, whereas some competitors offer flat-rate alternatives.
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