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Polar

Merchant of record and usage billing for developersOpen source

About Polar

Polar, from Polar Software, Inc., is an open-source billing platform that acts as merchant of record, collecting payments and remitting sales tax and VAT for sellers; lately it focuses on usage billing for AI products. As of 2026-10-25 the Apache-2.0 repository has 10,419 stars. Starter is free at 5% + 50¢ per transaction; paid plans cost $20 to $400 a month and go down to 3.4% + 30¢. Good fit for small teams selling software who don't want to register for taxes. Physical goods, donations and marketplaces are out of scope, and the first payout waits on a review of up to 14 days.

EditorialUpdated 10 min read

What it is

Polar is a billing and payments platform for software developers; the GitHub repository description reads "A billing platform for the intelligence era". At its core it is a merchant of record: when a customer pays, the legal seller is Polar, which calculates, collects and files sales tax and VAT in each jurisdiction and then pays out the remaining revenue to the developer. The docs describe Polar as a reseller that takes on international sales-tax liability without getting in the way of the seller's relationship with customers.

On top of payments, Polar provides a full billing toolkit: one-time purchases, subscriptions, seats, usage billing, credits, trials and discounts, plus checkout, a customer portal and dunning. The README opens with "Turn usage into revenue" and says Polar is built for AI startups that need to charge for tokens, agent runs and compute without building billing infrastructure from scratch.

The project is maintained by Polar Software, Inc. and licensed Apache-2.0. As of 2026-10-25 the repository has 10,419 stars and 809 forks, with 18,480 commits on main; the latest is from 2026-10-23 23:11 (UTC+8).

Technically it is a monorepo. DEVELOPMENT.md says the backend is written in Python, exposes a REST API and background workers, and depends on PostgreSQL, Redis and S3-compatible storage; the README's credits list FastAPI, Pydantic, Dramatiq and SQLAlchemy. The frontend lives under clients: the web app is built on Next.js, and the same folder holds the checkout components, the CLI and the MCP server.

Turn usage into revenue.

Polar README

Core capabilities

First, the merchant-of-record service. The MoR docs compare Polar with payment service providers such as Stripe: a PSP offers low-level APIs and leaves the tax liability with the seller, while Polar is built on Stripe, uses Stripe Tax to calculate tax, and handles registration and remittance itself. The homepage says Polar operates as merchant of record in over 100 markets. Sellers remain responsible for their own income tax. Supported regions are listed in the official docs. Payouts go through Stripe Connect Express, and the payee must be in one of the listed countries and regions.

Second, usage billing. The docs describe three steps: the app sends events to the ingestion API, each carrying a name, a customer ID and arbitrary metadata; a Meter filters and aggregates them, for example summing total_tokens on ai_usage events; then a metered price is attached to a subscription product. Credits can be granted each billing cycle through a Meter Credits benefit. The page opens by calling this a new feature.

Third, automated benefit delivery. After a purchase Polar can send license keys, serve file downloads of up to 10GB, invite customers to a private GitHub repository or assign Discord roles. The docs call these Benefits.

Fourth, developer tooling. Polar maintains JavaScript and Python SDKs, and the GitHub releases show adapters for Next.js, Nuxt, TanStack Start, Astro and Better Auth, along with an embeddable checkout. The CLI reached 3.0.0 on 2026-10-16 19:06 (UTC+8), adding webhook forwarding and test events, token creation and JSON output, with confirmation required for destructive commands. The homepage also describes an MCP server at mcp.polar.sh that connects to Claude, Cursor and ChatGPT over OAuth.

Fifth, a separate sandbox. Instead of a test-mode toggle, Polar runs sandbox.polar.sh and sandbox-api.polar.sh, with accounts, organizations and tokens kept apart from production, and Stripe test cards work through the full checkout. The docs explain that because money is involved, fully separating live and test data is safer.

Who it's for / Not for

Good fit: solo developers and small teams selling software, SaaS or digital products who don't want to register for taxes in each jurisdiction. The Acceptable Use Policy lists software, templates, ebooks, code, fonts, courses, and access to GitHub repositories and Discord servers as sellable.

Good fit: AI products that charge by tokens, calls or compute. Event ingestion, Meters, metered prices and credits are already in the product, and both the homepage and the README put AI companies first. Early-stage AI startups can apply to the Startup Program for 12 months of the Scale plan at no charge.

Good fit: TypeScript or Python teams that care about integration speed. The official SDKs, framework adapters, CLI and separate sandbox cover most of the path from development to launch.

Not a fit: businesses selling physical goods or human services, or running donations, crowdfunding, sponsorships or marketplaces. The Acceptable Use Policy lists these as prohibited and says Polar can refuse service at its discretion; adult content, AI companion services, financial trading and crypto assets are on the list as well.

Not a fit: teams with high monthly revenue whose priority is the lowest possible rate. The MoR docs themselves say a PSP like Stripe is the better choice for sellers who want the lowest fees and can handle international taxes themselves.

Not a fit: businesses that can't live with payment reviews. Before the first payout there is a business review and identity check that can take up to 14 days; after that, transactions are reviewed continuously and payouts can be held.

How it compares

Lemon Squeezy and Paddle are the closest peers, and both are merchants of record. As of 2026-10-25, Lemon Squeezy's pricing page lists 5% + 50¢ per transaction, and Paddle's lists 5% + 50¢ per checkout transaction with custom pricing for high volume. Polar's free Starter rate matches both; the difference is that Polar publishes three paid plans with lower rates, down to 3.4% + 30¢.

Stripe Billing takes a different route. Its pricing page shows 0.7% of billing volume on top of card processing at 2.9% + 30¢, and tax liability stays with the seller.

Stripe itself now offers a merchant-of-record service. The Stripe Billing page lists Managed Payments as a merchant of record solution, and the top of Lemon Squeezy's pricing page carries a 2026 update about Lemon Squeezy and Stripe Managed Payments. Inference: with the underlying payment provider entering the market, MoRs built on Stripe such as Polar need to differentiate on features, which also explains Polar's push into usage billing and AI.

Compared with these, Polar's difference is that its code is open source. Sellers can read how billing, checkout and tax handling are implemented and follow commits and issues on GitHub. Inference: open code makes debugging integrations easier, but what sellers are really buying is Polar the company's merchant-of-record status, which the code can't replace.

Getting started

Step one is the sandbox. Developers sign up for an account and organization at sandbox.polar.sh and run a checkout with Stripe's test card 4242 4242 4242 4242; the API points at sandbox-api.polar.sh, with a separate token created there. The review docs warn explicitly against test purchases with real cards, since processors flag them as card testing and may block the card or the account.

Step two: integrate products. One-time products and subscriptions can be created in the dashboard and sold through checkout links, embedded checkout or the checkout API; the framework adapters save some routing and webhook code. Usage billing needs a Meter first, then a metered price on a subscription product, then events sent from the app.

Step three: prepare for the launch review. Before the first payout the seller submits business details for review, verifies identity with an ID and selfie through Stripe Identity, and connects a payout account via Stripe Connect Express. The docs say the review can take up to 14 days.

Step four: plan for support. The review docs make sellers responsible for customer support; when Polar loops a seller into a support thread it expects a reply within 48 hours, otherwise it may refund the customer and issue a warning, and repeated unresponsiveness leads to offboarding.

Self-hosting is not the recommended path. The docs say self-hosting is technically possible but recommend the hosted service to get the full merchant-of-record benefits, including global tax compliance. Local development per DEVELOPMENT.md needs Docker, uv, pnpm and Node.js, which suits people who want to contribute or study the implementation.

Pricing & license

The fees doc listed four plans on 2026-10-25: Starter is free at 5% + 50¢ per transaction; Pro is $20 a month at 3.8% + 40¢; Growth is $100 a month at 3.6% + 35¢; Scale is $400 a month at 3.4% + 30¢, with a shared Slack channel and single sign-on. Features are the same across plans; rates and support levels differ.

Several extra fees apply: international card transactions add 1.5%; each dispute costs $15; the original fee isn't returned on refunds. Payouts run through Stripe at $2 per month with an active payout, 0.25% + $0.25 per payout, and 0.25% to 1% for currency conversion. If the chargeback rate rises above roughly 0.7%, the account may be suspended.

Organizations created before 2026-05-27 keep the "Early Member" rate of 4% + 40¢ per transaction plus 0.5% on subscriptions, indefinitely; upgrading to a paid plan retires it, and downgrading afterwards lands on 5% + 50¢.

The code is licensed Apache-2.0 with Polar Software, Inc. as copyright holder; the license was added on 2023-05-12 16:32 (UTC+8). The hosted service is governed separately by terms including the Acceptable Use Policy.

Risks & limits

First, payments can be reviewed and held. The review docs say the review before the first payout takes up to 14 days, after which all transactions are monitored and payouts can show as "Held for review". The Acceptable Use Policy says Polar may refuse any product at its discretion and can add to the list at any time.

Second, rates change. The 2026-05-20 blog post introduced paid plans and moved new organizations' Starter rate from 4% + 40¢ plus a 0.5% subscription fee to 5% + 50¢; it says the change lowers Polar's own revenue forecast, and existing organizations keep their old pricing. Inference: it also shows rates are set by Polar alone.

Third, open source doesn't mean independence from the hosted service. The docs recommend the hosted version for the full merchant-of-record benefits, and the Acceptable Use Policy forbids reverse engineering the "Services" or attempting to derive their source code. Inference: that boilerplate clause targets the hosted service while the repository is licensed Apache-2.0, so the two don't clash.

Fourth, usage billing is still moving fast. The usage-billing docs label it a new feature; the homepage marks the new Usage Billing Engine as "coming soon" with early access. The 2026-10-08 blog post describes local-first zero-latency metering, Signals, pricing as code and "identities" for humans and machines alike, currently at the prototype and design-partner stage. Inference: teams integrating now may need to migrate once later.

Fifth, much of the project conversation happens outside GitHub. The README says feature requests and bugs go through the Feedback button in the dashboard sidebar; as of 2026-10-25 GitHub shows 66 open issues and 71 open PRs. CONTRIBUTING.md requires an existing issue assigned to the contributor before a PR, except for minor fixes, and untested, fully AI-generated PRs are closed immediately.

Sixth, vulnerabilities are reported privately. SECURITY.md asks for reports through private GitHub Security Advisories, scopes polar.sh and api.polar.sh, promises acknowledgement within a few days and leaves rewards to Polar's discretion.

Seventh, the releases page doesn't track the service. As of 2026-10-26, all 76 GitHub releases are SDKs, the CLI, checkout components and framework adapters; the hosted service itself has no version number.

How it got here

The GitHub repository was created on 2023-01-26 18:04 (UTC+8); a minute later came the first commit, authored under the name Birk Jernström, described as the "initial commit & barebones structure of new FastAPI app". On 2023-05-12 16:32 (UTC+8) the repository added the Apache-2.0 license. The product at that stage centered on issue funding (pledges), letting people put money on open-source GitHub issues. The first release, jssdk/v0.1.0, appeared on 2023-10-13 18:26 (UTC+8).

Polar officially launched in September 2024, according to both the seed-round and the plans blog posts; after that the focus moved to merchant of record and digital-product sales. SECURITY.md was added on 2024-09-26 15:08 (UTC+8).

In 2025 the old issue-funding features were torn out. A commit on 2025-03-20 21:33 (UTC+8) removed the ability to create new pledges, and one on 2025-04-09 22:35 (UTC+8) removed most issue-funding features, touching 189 files and deleting 35,651 lines; related services and data models were still being cleaned up in 2026. On 2025-06-17 Polar announced a $10M seed round led by Accel, and the post cited 17,000+ signups and 5,300 GitHub stars at the time. CONTRIBUTING.md was added on 2025-09-25 14:49 (UTC+8).

The Pro, Growth and Scale paid plans launched on 2026-05-20, with the new Starter rate effective from 2026-05-27. A 2026-10-08 blog post laid out the next direction: local-first metering, pricing as code and an identity model built for agents, along with a call for design partners.

As of 2026-10-25 the GitHub contributors API returns 125 accounts, led by frankie567, emilwidlund, zegl, birkjernstrom and Yopi. The company page describes "a small senior team" backed by Accel, Abstract, Mischief and a number of angel investors.

Our verdict

Polar has moved from an open-source funding tool to a merchant-of-record and usage-billing platform for AI and software companies. Public code, frequent commits and openly posted rates are what set it apart from Lemon Squeezy and Paddle.

Inference: the real risk is the payment channel rather than the code. Account reviews, the acceptable-use list and rates are all Polar's call.

Why it stands out

Polar is a merchant of record for developers. It handles payments, subscriptions, licenses, and tax for people who want to sell software without incorporating a finance department, and the whole platform is open source.

Birk Jernström built it with a small team, and the product is unusually developer-native: the SDKs, webhooks, and checkout are designed by people who have integrated many payment providers and remember the pain.

It is an open source merchant of record that handles payments, subscriptions, licenses and tax for developers selling software.

Sources

Official

  1. polarsource/polar on GitHubGitHub · Accessed Oct 25, 2026
  2. Polar READMEGitHub · Accessed Oct 25, 2026
  3. Polar LICENSE (Apache-2.0)GitHub · Accessed Oct 25, 2026
  4. Polar SECURITY.mdGitHub · Accessed Oct 25, 2026
  5. Polar CONTRIBUTING.mdGitHub · Accessed Oct 25, 2026
  6. Polar DEVELOPMENT.mdGitHub · Accessed Oct 25, 2026
  7. Polar commit 3be5b81: Initial commit & barebones structure of new FastAPI appGitHub · Accessed Oct 25, 2026
  8. Polar commit 13813e9: remove most of issue funding featuresGitHub · Accessed Oct 25, 2026

Updates & reading