Polar resells the software and pays out the rest
Polar is billing infrastructure for software sellers, and its hosted service is the merchant of record: the customer legally buys from Polar, not from the developer. Polar takes the payment, charges and remits VAT, GST or US sales tax wherever it is owed, sends receipts and chases failed payments, then pays the balance out. The platform code, a Python backend with a Next.js frontend, is open source under Apache-2.0.
License keys, GitHub invites and metered usage billing
- Benefits granted on purchase: license keys with a custom prefix, activation limits and revocation when the subscription ends, file downloads up to 10 GB each, private GitHub repository invites, Discord roles and API-driven feature flags.
- Usage-based billing: the app sends events, meters filter and aggregate them, and a metered price charges for the result. The README's examples are model tokens, agent runs and GPU seconds. Subscriptions, per-seat prices, credits, trials, discounts and pay-what-you-want pricing combine with it.
- Payouts in 119 countries through Stripe Connect Express, India included, where Stripe Payments is invite-only. Buyers pay Polar (US), so the developer's own account never takes a direct sale.
- Integration: public API, webhooks, JavaScript and Python SDKs, packages for Next.js, Nuxt, TanStack Start and Better Auth, a CLI, and a sandbox for testing without real cards.
5% plus 50 cents, a KYC review and a 120-day exit hold
Starter, the free plan, takes 5% + 50¢ per transaction. Every organization created since May 27, 2026 starts there. Paid plans, from $20 to $400 a month, bring it down as far as 3.4% + 30¢. Cards issued outside the US add 1.5%, each dispute costs $15, and Stripe charges its own payout fees. The older 4% + 40¢ rate survives only for organizations created before May 27, with 0.5% extra on subscriptions.
Self-hosting the code does not make anyone a merchant of record. The development guide sets up a Python backend with PostgreSQL, Redis, S3-compatible storage and Stripe webhooks. The docs call self-hosting "technically possible" and recommend the hosted service for tax compliance: the liability sits with Polar the company, registered in jurisdictions around the world, not with the software.
Accounts are reviewed before the first payout. The owner describes the business, verifies their identity with an ID and a selfie through Stripe Identity, and connects a payout account; the review can take up to 14 days. The acceptable use policy bans physical goods, human services, donations, crowdfunding and sponsorships. Pre-orders and AI content generation tools get closer review, even though the homepage pitches Polar as "modern billing for AI companies". Polar holds accounts to a 0.4% chargeback rate.
The README is written for AI startups charging for tokens, agents and compute. The merchant of record docs spell out the trade-off against a payment processor such as Stripe: less freedom over pricing models and higher fees, in exchange for not owning the tax liability. Staying the merchant and wiring up your own processors is the job of a payment switch like Hyperswitch.
Leaving Polar goes through its support team. The team moves customers and saved cards, most easily to another Stripe account; products, prices, benefits and active subscriptions have to be rebuilt on the new provider. New checkouts are switched off, and the remaining balance is held for 120 days to cover late refunds and chargebacks.
The platform itself has no numbered release. GitHub releases cover the SDKs and framework integrations; the latest, @polar-sh/cli 3.0.0, shipped on October 16, 2026. The main branch took 248 commits in the week of October 20 to 26, 2026, and the docs still label usage-based billing a new feature.