Lemon Squeezy is slashing its payout fees — so long as you use Stripe

Lemon Squeezy has slashed its fees for stores that get payouts via Stripe. Payouts to U.S. bank accounts will now be free, while international users will pay 1%.

It's a major drop for both U.S. and international users, who previously sacrificed 0.5% + $2.50 or 3% + $2.50 of to access their income, respectively.

Lemon Squeezy will still charge a flat fee of $0.50 for U.S. payouts sent through Paypal, and 3% (up to $30) for international accounts.

The reduced rates, which the company will apply automatically from October 28th, do not affect its platform fee. Like close rival Paddle, Lemon Squeezy charges stores 5% + $0.50 per transaction.

Co-founder and CEO JR Farr credits the new pricing to the firm's recent acquisition by Stripe. The digital payments behemoth bought Lemon Squeezy in July.

He said in a statement: "This fee reduction is just one example of how we’re continually working to improve our platform and keep it aligned with your needs.

"As Lemon Squeezy is now part of Stripe, you can expect even more enhancements and features that will help you sell more efficiently with less hassle."

Indie hackers have largely welcomed the reduced fees. "Absolutely amazing news, well done guys," Taplio founder Tibo commented on X.

Others used the announcement to press Farr on the future of the platform.

"Cool! Is the plan to grow LemonSqueezy or to integrate it directly into Stripe and phase it out later?" asked Tommy Di Rossi of Notaku.

"At the end of the day, I'd really rather just use Stripe directly," wrote indie maker Ben Katz. "Is your plan to let LS users migrate to Stripe entirely at some point? Is there a timeline on that effort if so? LS should really just become 'Stripe Tax 2.0'"

What is Lemon Squeezy?

Lemon Squeezy is a payment platform for digital businesses. It was founded in 2020 by friends JR Farr, Gilbert Pellegrom and Orman Clark and launched publicly in 2021. It hit $1M ARR within nine months.

The company facilitates payments via an API and pre-designed checkouts that let users offer subscriptions, one-off payments and license keys through their websites and apps. Payments themselves are processed by providers like Stripe.

Lemon Squeezy is a merchant of record, so wherever your customers live, it will deal with their local sales tax.

Farr says he and his co-founders "designed the platform to reduce the stress of "tax headaches, fraud prevention, handling chargebacks, license key management, and file delivery, among other things."

It's more expensive than using Stripe or another payment provider alone. But many SaaS companies find it cheaper and simpler to use than handling their own global taxes.

How do payouts work?

Every time a customer makes a purchase through a user's Lemon Squeezy store, their payment is held in a business's Lemon Squeezy account.

These funds are released twice a month, assuming a user has hit a minimum payout threshold.

Rival Paddle's platform fee is also currently 5% + $0.50 per transaction, but it doesn't charge payout fees as standard.

Paddle does, however, add a $15 SWIFT fee for transferring to bank accounts in certain countries.

PayPal and a user's own bank may also charge to receive payouts.