Most affiliate programs start in a spreadsheet. You manually calculate commissions, batch them every month, and process payouts via Stripe Connect, Wise, or PayPal. For a while—usually up to $100K annual payout volume—this works fine. Then it breaks: tax ID validation becomes a chore, your payment rail fees balloon, reconciliation takes a full day, and one manual error costs you a dispute and three hours of apologies. Stripe, Paddle, and custom code all solve this, but they solve different problems at different scales. This is a real-world comparison of fees, commission math, tax handling, and payment-rail support across three tiers of affiliate business. The spreadsheet + Stripe baseline: $50K–$150K payout volume Start here if you have fewer than 50 active affiliates and process payouts fewer than 12 times per year. The math is simple: Commission calculation: Manual in spreadsheet, validated by eye. Tax ID handling: Collected via form or email, stored in a folder. Payment: Stripe Connect payouts (2% + $0.25 per transfer), or bulk transfers to known bank accounts via Wise ($1–$3 per transfer depending on destination region). Reconciliation: Exported CSVs matched against bank statements. 2–4 hours per payout cycle. Total overhead: Your time only; software costs: $0. Reality check: At $50K annual payouts (roughly 100 transfers of $500 each), Stripe Connect costs $500–$600 in fees alone. Wise costs $100–$300. But your time to manually validate and reconcile costs more than both combined. This works if: Your affiliate list is stable and well-known. You pay out on a fixed schedule (monthly or quarterly). Commission rates are simple (flat % or tiered, not algorithmic). You accept 2–3% in reconciliation friction and tax ID chasing. This breaks when: You need to validate tax IDs before payment (U.S. 1099 requirements, Indonesian NPWP, etc.). Affiliates demand real-time payout tracking or multiple payment methods. Commission rules become conditional (bonus for hitting MRR targets, tiered by geography, etc.). You scale to 100+ affiliates or weekly payouts. Stripe Connect + Stripe Billing: the halfway house ($150K–$300K) Stripe's native tooling lets you skip the spreadsheet for commission math and payment tracking. If you're already using Stripe for your main product, this is tempting—single API, one dashboard, familiar webhooks. Commission math and payout mechanics You calculate commissions in your app (or spreadsheet), then create a Stripe Transfer for each affiliate account linked via Connect. Stripe handles the actual bank deposit. For batch payouts, Stripe Payouts API lets you send multiple transfers in one call—useful for monthly cycles. Fees on the Stripe side: Stripe Connect standard pricing: 2% + $0.25 per transfer (U.S. bank accounts). International accounts cost 2% + $0.50 or higher. If affiliates use Stripe's on-platform balance (rare for affiliates), Stripe keeps 5–10% of that balance on top of processing fees. No native tax ID validation—you must collect 1099 data or NPWP yourself and reconcile it in your app. Payment rail support Stripe Connect works best for U.S. bank accounts and major European banks. For Southeast Asia (Malaysia, Indonesia, Singapore), bank routing is slow and expensive. Affiliates often request PayPal or Wise instead. You then need to manage three payment methods in parallel—Stripe for some, Wise for others, PayPal for the rest—which kills the point of automation. Tax ID validation Stripe Connect doesn't enforce tax ID collection. You collect it via form or email, store it yourself, and manually check it against any regulatory requirements (1099-NEC filing, NPWP matching, etc.). At $200K+ in annual payouts, this becomes a compliance liability. When Stripe suffices Mostly U.S. and EU affiliates. Simple tiered commission (e.g., 10% of revenue, 15% if $10K MRR, etc.). Monthly payouts to fewer than 100 affiliates. Comfortable with 2–3% in transfer fees and handling tax ID yourself. When it breaks Affiliates in Southeast Asia, LatAm, or Africa—payment rail costs and speed become unacceptable. Conditional commissions (performance bonuses, geographic multipliers, product-level splits). Regulatory requirements (1099 filing, NPWP validation, GST/SST collection). You need affiliate-facing dashboards or real-time payout status. Paddle: abstraction that costs ($250K–$500K+) Paddle is a payment orchestration platform—they sit between you and payment processors, handling commission calculation, tax ID validation, compliance, and payout rails all in one place. They're designed for software vendors with recurring revenue, but their affiliate module works for SaaS, digital products, and info products too. Commission math and calculation Paddle lets you define commission rules in their dashboard: flat %, tiered by MRR, geographic multipliers, product-level splits. You set it once, and Paddle calculates and tracks everything automatically. No spreadsheet, no API calls, no manual reconciliation. Their