A merchant of record for licensed software should keep license access in sync with each sale, not just generate a key and stop there. When a customer upgrades their plan, the license should update with it. When a subscription lapses, access should follow, not keep running as if nothing changed.
Most platforms don’t work that way. They treat the sale and the license as two separate systems, which leaves you stitching the two together after checkout.
This guide compares six merchant of record platforms that support software licensing, showing what each one handles on its own and where your infrastructure still has to take over.
For a broader comparison of payments and tax coverage across MoR platforms, see our selection of the best merchant of record platforms for software. If a standalone licensing tool fits your setup better, compare the best software licensing solutions for plugin and desktop developers instead.
Best merchant of record platforms for licensed software at a glance
| Platform | Best for | Licensing depth | What you still manage | Starting price |
| Freemius | Full licensed-software lifecycle | Keys, activations, billing sync, entitlements, updates | Product-side API or SDK integration | 4.7% |
| Polar | API and AI usage quotas | Keys, activations, quotas, conditions | Usage reporting and software delivery | 5% + 50¢ |
| Dodo Payments | One key per purchased seat | Keys, activations, billing events, imports | Update delivery and in-product upgrades | 4% + 40¢ |
| Lemon Squeezy | Device-based product editions | Keys, activation instances, subscription expiry | Feature entitlements and update logic | 5% + 50¢ |
| Gumroad | Basic purchase verification | Keys and a usage counter | Devices, limits, revocation, entitlements | 10% + 50¢ |
| PayPro Global | Existing external license servers | Key delivery and purchase webhooks | Generation, validation, activations, revocation | Custom quote |
Gateway, international-card, subscription, payout, tax-base, and dispute charges vary by platform, so compare the effective cost for your own payment mix.
Freemius: Best overall for software sellers who want licensing built into the full sales lifecycle
Freemius is a merchant of record and software monetization platform for SaaS businesses, desktop apps, browser extensions, AI-built apps, plugins, and themes. Checkout, subscriptions, licensing, and global tax compliance run through the same system, so a purchase automatically creates the license, a renewal extends it, and a cancellation or failed payment updates access without a webhook in between.
For makers selling licensed software, that means one less system to keep in sync as transaction volume grows.
Licensing follows the payment lifecycle
Freemius links each license to its transaction and subscription. Renewals extend the license, while delayed payments cause temporary expiration until processed. Freemius also initiates a dunning campaign for failed payments.
License updates automatically occur with other subscription changes:
- Upgrades/Downgrades: Update features and license allowance.
- Cancellations: License remains active through the paid term before expiring.
- Refunds: Access can be revoked.
Licensing covers plugins, desktop apps, and browser extensions
The same license activation API supports WordPress products, Windows/macOS/Electron apps, browser extensions, and SaaS.
For desktop apps and browser extensions, your product registers each installation with a consistent device ID. The API supports runtime validation and deactivation, allowing customers to move licenses without a new key. You can:
- Set activation limits per license
- Create different license allowances for each pricing option
- Gate features by plan
- Activate, validate, deactivate, extend, or cancel licenses
- Track license status and customer activity from the Developer Dashboard
- Let customers manage their active installations
For WordPress products, the Freemius SDK connects licensing with plan-based feature access and in-dashboard upgrades.
Testing and staging installs can be excluded from paid activation counts, preventing production license consumption for testing.
Software delivery follows license status
A customer’s license determines download access. For WordPress, valid licenses receive premium releases via the standard WordPress update interface.
You can publish beta versions, schedule releases, or use staged rollouts to distribute an update to part of your customer base before making it available to everyone.
The deployment process can generate free and premium versions from one codebase by removing premium-only code from public builds, linking plan rules, code access, and update delivery for plugin developers.
Desktop and browser-app sellers can provide protected download links and control version availability after license expiration.
Freemius owns the transaction and its tax liability
Its software-specific checkout supports subscriptions, lifetime purchases, and free trials, offering coupons, bundles, multi-license pricing, multiple currencies, credit cards, and PayPal. WordPress developers can embed checkout in WP Admin, while others use hosted links or overlay checkout.
As the merchant of record, Freemius is the legal seller, handling financial and legal aspects, including tax calculation, collection, reporting, registration, and remittance for applicable value added tax (VAT), GST, and US sales tax.
Freemius simplifies global tax compliance by applying current tax rules to all transactions, reducing administrative work and eliminating the need for sellers to manage international tax laws or set up local legal entities.
It also offers fraud detection, dispute management, and takes legal responsibility for chargebacks. Additionally, Freemius ensures broader regulatory compliance for software sales, including consumer protection and GDPR.
Sellers gain access to integrated revenue tools like:
- Automated cart-abandonment recovery
- Failed-payment recovery and dunning
- Exit-intent coupons
- Affiliate management
- Subscription upgrades with automatic proration
- Multi-product bundles and add-ons
These tools connect conversion optimization with billing, licensing, and post-sale access.
“Freemius handles all the tax obligations for the software I sell, along with the entire checkout flow. On top of that, they provide a fantastic licensing system that fits my needs perfectly.” — Bram van der Giessen, Speed Booster for ChatGPT
Customer self-service
The Freemius Customer Portal allows buyers to manage licenses and billing independently, reducing support tickets. Customers can:
- View and recover license keys
- See active installations
- Deactivate old installations
- Upgrade or downgrade plans
- Update payment methods
- Renew or cancel subscriptions
- Redownload purchased software
- Download tax-compliant invoices
Freemius pricing
- Freemius uses a progressive revenue-share model, where the percentage decreases as monthly sales and transaction volume grow.
- There are no monthly platform fees or feature tiers.
- Pricing starts at 4.7% for SaaS and desktop apps, and 7% for WordPress products, decreasing to 0.5% for monthly revenue over $100,000.
Migration keeps existing licenses intact
Freemius provides hands-on migration assistance transferring existing customers, subscriptions, license keys, and purchase records from other systems (like Paddle, Lemon Squeezy, Gumroad, Easy Digital Downloads, WooCommerce, CodeCanyon, and custom systems) without disrupting active customers.
To learn more, book a call with the Freemius team.
Polar: Best for API and AI products requiring usage-based billing within license keys
Polar is a developer-focused merchant of record that integrates checkout, subscription management, tax handling, usage billing, and license key management.
It uses usage-based license keys, each with its own consumable quota, making it suitable for selling API calls, AI credits, tokens, or other metered resources.
Key features
- Automatic license generation post-purchase/subscription
- Custom key prefixes and fixed expiration periods
- Activation limits for devices, users, or instances
- Custom validation based on IP, MAC, software version, or other metadata
- Separate usage quotas for each license key
- Automatic license revocation upon subscription cancellation
- Customer-managed activation, deactivation, and usage visibility
Polar pricing
- Starter: 5% + $0.50 per transaction (all core selling features)
- Pro: $20/month + 3.8% + $0.40 transaction fee.
- Growth: $100/month + 3.6% + $0.35 transaction fee.
- Scale: $400/month + 3.4% + $0.30 transaction fee, plus priority support, shared Slack, and SSO.
- Additional fees: 1.5% for international cards, plus payment-provider payout fees.
Polar’s percentage fee is calculated on the total transaction value, including VAT/sales tax.
Polar manages license access, not software deployment. It doesn’t include software updates, release management, staged rollouts, or WordPress-specific licensing. These must be built separately if needed.
Your application must call Polar’s validation API directly to record usage; Polar stores and enforces the quota. Due to its reliance on a hosted API, Polar is not suitable for software requiring entirely offline activation and validation.
See also: Polar vs Freemius
Dodo Payments: Best for team software requiring a separate license key per purchased seat
Dodo Payments offers payments, subscriptions, tax, compliance, digital product delivery, and license key management.
It generates a unique license key for each seat or unit purchased (e.g., a five-seat subscription yields five keys), making it ideal for team software where each employee needs their own key and activation history.
Key features
- Automatic generation and email delivery post-payment
- One license key per product quantity or subscription seat
- Activation limits and fixed expiration periods
- Public activation, validation, and deactivation endpoints (no API credentials needed)
- Automatic suspension during payment holds and reactivation upon recovery
- Automatic revocation upon cancellation, expiry, or refund
- Supports imported, manually supplied, and Dodo-generated license keys
- Existing key migration via API
The “manually supplied” option allows you to generate keys elsewhere, and Dodo handles delivery to the customer after a purchase creates a pending license grant.
License keys are part of Dodo’s entitlement system, allowing a single purchase to grant a key, file download, GitHub access, Discord role, or other benefits.
Dodo Payments pricing
- 4% + $0.40 per transaction, no monthly fee.
- Percentage fee applies to total customer payment, including tax.
- Custom enterprise pricing available for larger businesses.
When plans change, Dodo disables old keys and generates new ones, requiring customers to re-enter or activate new keys. Dodo provides license generation and validation but not a complete software release system; you manage version deployment, updates, and upgrade flows separately.
Lemon Squeezy: Best for software with one-device and multi-device editions
Lemon Squeezy acts as a merchant of record for software, subscriptions, and digital products.
Its licensing uses product variants (e.g., one-device, three-device licenses), each with its own price and activation limit. A unique key is generated per purchase and delivered via receipt and the customer’s “My Orders” page.
This suits simple applications priced by installation count, eliminating the need for custom key generation or activation logic.
Key features
- Automatic license key generation
- Separate activation limits per product variant
- Fixed license lifetimes for one-time purchases; expiry tied to subscription status for recurring products
- API for activating, validating, and deactivating keys
- Activation instance tracking with unique IDs
- Product, variant, order, and customer data returned during validation
- Webhooks for license creation and subscription events
Lemon Squeezy pricing
- No monthly fee for e-commerce and licensing.
- Standard transaction fee: 5% + 50¢ per sale.
- Additional fees:1.5% for non-US transactions, 1.5% for PayPal, 0.5% for subscription payments.
- Custom pricing for high-volume businesses and products under $10.
Lemon Squeezy manages keys and activation instances, not granular software entitlements. Its API returns the purchased product and variant, but your application determines which features are enabled.
The documentation doesn’t cover offline activation or built-in device fingerprinting; your application provides the instance name during activation and must store the returned instance ID for deactivation.
There’s also a company-direction factor to weigh. Lemon Squeezy confirmed in its January 2026 update that its team is now building Stripe Managed Payments — the merchant-of-record product Stripe launched after acquiring Lemon Squeezy in 2024 — and is developing a migration path for Lemon Squeezy customers to move over.
Lemon Squeezy hasn’t announced an end date for the current product, but sellers should confirm how license data and activation workflows would carry over before making a long-term platform commitment.
See also: Lemon Squeezy vs Freemius
Gumroad: Best for creators selling a simple app alongside other digital products
Gumroad is a merchant of record and creator-commerce platform for selling apps, ebooks, courses, memberships, and other digital products through one storefront.
Its licensing is built for simple purchase verification, not device-level activation control. It generates a key for each buyer and returns a usage counter your application increments and enforces. That makes it a fit if software is only one part of a broader creator business. For example, you could sell a small desktop utility alongside a course and use the same Gumroad storefront for both.
Key features
- Automatic license key generation for new and previous purchases
- Keys delivered through receipts, download pages, and Gumroad product pages
- Verification API that returns the purchase and license status
- Usage counter that can increment with each verification request
- Refund, dispute, chargeback, and subscription status included in API responses
- Multi-seat licenses with adjustable seat quantities
- Manual key disabling and usage-count adjustments
- Storefronts, memberships, email broadcasts, and affiliate tools for other digital products
Gumroad pricing
- No monthly platform fee
- Sales through your profile or direct links: 10% + $0.50 per transaction
- Sales through the Gumroad Discover marketplace: 30% transaction fee
- As a merchant of record, Gumroad manages global tax compliance
Gumroad provides a usage counter, not a full activation system. It doesn’t record which device used a key, distinguish a new installation from a repeated check, or let you deactivate one specific device. Your application decides when to increment the counter and what happens once the buyer reaches your limit.
Subscription access requires the same kind of manual handling. Gumroad returns timestamps for ended, canceled, or failed memberships, but the license remains enabled until you disable it. Your application has to inspect those fields and revoke access itself.
Gumroad also doesn’t support importing existing license keys. Sellers migrating to Gumroad either let it generate new keys or continue managing their original keys outside the platform.
See also: Gumroad alternatives: 8 better options for SaaS and software makers
PayPro Global: Best for software companies that already run their own licensing server
PayPro Global is a merchant of record for SaaS, desktop software, and video games, with localized checkout supporting 70+ payment methods and 140+ currencies. That helps with international sales as you expand into new markets.
PayPro Global doesn’t generate or manage licenses; it delivers keys created by your system. You can either upload a list of pre-generated keys or have PayPro Global send order details via POST request to your external license generator. The returned key is then displayed on the confirmation page and in the purchase email.
Key features
- Upload pre-generated license keys
- Send one key per unit purchased
- Receive low supply notifications for uploaded keys
- Integrate with an external license generator via POST request
- Display keys on confirmation pages and in purchase emails
- Attach license keys as files to confirmation emails
- Grant product access via purchase and subscription webhooks
- Offers localized checkout with 70+ payment methods and 140+ currencies
PayPro Global pricing
- No public standard transaction fee.
- Custom quotes based on business needs.
- Quoted price includes all platform features, assisted integration, and support.
PayPro Global’s documentation doesn’t cover native device tracking, activation limits, deactivation, offline validation, or feature entitlements; these must be built into your chosen licensing path.
Similarly, subscription access requires your system to manage access based on PayPro Global’s recurring payment events.
Choose based on the licensing logic you want to offload
- Freemius: Best for managing checkout, subscriptions, license state, activations, customer self-service, software updates, and sales tax compliance from a single platform.
- Polar: Ideal for licenses with consumable balances (e.g., API calls, AI credits), offering usage quotas, validation conditions, and feature flags.
- Dodo Payments: Suitable when each purchased seat needs a unique key or when delivering licenses alongside other entitlements like files or access roles.
- Lemon Squeezy: Good for straightforward one-device and multi-device editions, with product variants, activation limits, and a license API covering common needs.
- Gumroad: A simple option for selling apps alongside other creator products, where purchase verification is enough.
- PayPro Global: Choose if you already operate a licensing server, as it handles key delivery while your infrastructure controls activation, validation, and revocation.
For minimizing overall commerce and licensing logic maintenance, Freemius is the strongest default. Other solutions are better if they precisely match your product’s existing functionality.
Start selling licensed software with Freemius!
FAQ: MoR for licensed software
What is a merchant of record for licensed software?
A merchant of record (MoR) for licensed software is the legal entity responsible for the sale to the end customer. It handles the access workflow after purchase, assuming legal responsibility for tax, invoicing, and related regulatory compliance. This includes running checkout, collecting payments, remitting tax, and issuing invoices. Additionally, its licensing layer generates keys, records activations, and updates access after billing events.
Which merchant of record has the most complete software licensing system?
Freemius has the most complete licensing system among the platforms compared here. It connects license state to plans, subscriptions, downloads, and software updates, rather than only generating a key at checkout.
Does every merchant of record generate software license keys?
No. Freemius, Polar, Dodo Payments, Lemon Squeezy, and Gumroad generate a key after purchase. In contrast, PayPro Global distributes keys from a list you upload or from an external generator you operate.
What is the difference between key generation and license management?
Key generation creates a unique string and assigns it to a purchase. License management, however, determines whether that key is valid, where it is active, how many installations it allows, and when it expires.
Can a merchant of record replace license key management software?
Yes, if it provides the APIs and records needed to activate, validate, deactivate, expire, and revoke licenses. Your application will still need to call those APIs and decide what to show or restrict based on the response. Freemius can replace a separate license server for many products because it stores the license and activation records, enforces their limits, and updates their status from billing data. Platforms that only deliver keys still require a separate system to perform those tasks.
What happens to a license when a subscription ends?
That depends on whether the platform connects subscription status to license status directly. In an integrated system, the license stays valid through the paid period and expires when that period ends. Otherwise, the license and subscription have to be reconciled by hand.
Can customers manage their own license activations?
Yes, if the platform stores separate activation records and exposes them through a customer portal. The customer can select an old device or installation, deactivate it, and free that place within the license’s activation limit. Freemius provides this workflow through its Customer Portal, allowing customers to see where the license is active and remove an installation without asking the seller to reset the license manually.
Can I migrate existing software license keys?
Yes, if the platform can import the original key strings and associate them with the correct customers, products, plans, and activation records. Importing only the customers or purchase history does not preserve the existing licensing workflow. Freemius provides managed migration for these records, including active keys and their activations. This allows customers to continue using their existing keys instead of receiving replacements after the move.
Do software license keys prevent piracy?
No, they stop ordinary unauthorized use by requiring an application to validate a key. Activation limits, expiry, and revocation control how many installations can use a valid one. They don’t, however, stop someone from modifying the application itself to bypass the license check entirely.
