Three years ago, Mollie told me my idea was fantastic but that they weren't going to build it. "Feel free to do it yourself," they said. "We'll help you in any capacity we can." So I did. This is the story of why I'm building Vatly, a Merchant of Record for European SaaS.
It started with a failed project
Before Vatly, I was working on a platform to help animators sell their digital services online. It never went live. That's what happens sometimes. But while building it, I needed a simple way to sell online in Europe. That's when I found Mollie. I got sucked in by the online payment and billing side of things, and honestly never let go after that.
Their API was straightforward to integrate. More importantly, they understood the European market: localized payment methods, local acquiring, a company with real European DNA. To me, that has always mattered. Sure, Stripe is a fantastic product and their technology is great. But I have never wanted to rely on US big tech for critical infrastructure. Even if a company originally came from Ireland, once they choose to be American, that choice tells me something.
This isn't just a preference. It's a conviction.
Before I became a software engineer, I worked in critical infrastructure protection. I advised companies and organizations on reducing their dependence on distant, uncontrollable forces. It didn't make sense then for a power plant, and it doesn't make sense now for a fintech company. European businesses deserve European infrastructure.
So when I found that Mollie had no solution for SaaS companies to handle cross-border VAT compliance, subscriptions and billing for digital goods, I brought the idea to them directly. They explored it thoroughly for months. Then they came back and said: "It's still a fantastic idea. But we're doubling down on our core focus, being the best payment service provider we can be. If you want to build this, go ahead. We're highly interested in following your progress."
That was the push I needed.
The problem nobody wants to deal with
When I talk to European SaaS founders about how they handle VAT compliance today, I hear three common responses.
Option 1: Stay small and local. "We'll just stick to our home market, maybe expand one or two countries at a time." This works, but you're capping your growth. One country at a time is painfully slow when your competitors sell worldwide from day one.
Option 2: Ignore it and deal with it later. This has been popularized by some influencers online. "Just start selling internationally and fix compliance when it becomes a problem." I think that's a terrible idea. There is always something more urgent to fix than compliance, until the bill arrives. Ask the people at Basecamp about their experience in Texas. This approach might have worked ten years ago. Today, regulatory pressure is increasing worldwide. Tax authorities are getting more sophisticated at tracing transactions. E-invoicing mandates are rolling out across Europe. The window for "deal with it later" is closing fast.
Option 3: Cobble together a stack. Stripe launched Stripe Tax, which helps you determine the correct tax rate for an invoice and monitor your obligations. But it doesn't help with VAT registration in each country or the periodic filings you need to do. You still need local partners for that. And those partners cost money: €2,000 a year in some jurisdictions, €10,000 to €15,000 in others. I've seen even higher quotes. That's a lot to pay just to unlock two new markets.
And yes, there are competitors. One UK-based company that's in cash-cow mode, increasingly outdated. One that was recently acquired by Stripe and is being relaunched as Stripe Managed Payments, fully US-based. You could also go completely DIY, but after everything I've learned over the past four years, I would never recommend that to anyone.
What a Merchant of Record actually does
The concept is simple. Instead of you selling directly to your customers and dealing with tax obligations in every country they live in, a Merchant of Record becomes the legal seller on your behalf. Your customer buys from the MoR. The MoR handles tax registration, collection, invoicing, reporting, and periodic filings in every jurisdiction worldwide. You integrate once and get paid.
This means you don't need to register for VAT across Europe, sales tax in US states, GST in Australia, or whatever the local equivalent is. You don't need local fiscal representatives at €5,000 to €15,000 per country per year. You don't need to track changing tax rates, thresholds, or e-invoicing mandates across borders. The MoR takes that on. You sell worldwide from Europe without building a compliance department.
For your customers, nothing changes. They see your brand, your product, your pricing. The checkout is localized with their preferred payment methods and language. Behind the scenes, the MoR is the entity on the invoice, carrying the tax liability so you don't have to. You just receive a periodic consolidated invoice. That's it.
What makes Vatly different
Vatly is only going to serve European merchants. That's not a limitation. It's a feature.
Europe and especially the EU is our DNA. We have a remote team spread across the Netherlands, Germany, France, and Romania. Everyone brings their own local payment expertise and experiences to the platform. With Mollie as our payment service provider, we can offer an unmatched localized experience: iDEAL in the Netherlands, Bancontact in Belgium, local methods in France and Poland. Checkout language, payment methods, the entire flow is localized by default. We didn't bolt this on as an afterthought. It's in our DNA from the start.
The sovereignty angle matters too. We have a Europe-first policy on selecting vendors. About 90% of our vendor stack is EU-based, and we're working to move the remaining 10% over time. It's not just what we say, it's what we actually do.
Under the hood, we went deep on the architecture. Event-driven, largely event-sourced. This is a financial system where you need to reason clearly about what happened, when, and why. You cannot hand billing logic to an AI and hope for the best. We do leverage AI in specific areas and we've been progressive about it. But about 90% of the codebase has been written manually, cross-checked by at least four eyes.
Three years in: what I've learned
If I could talk to the version of myself who started this journey, I'd say: you're nuts. Completely nuts if you think you can pull this off.
It pulls on every skill you have. Engineering, architecture, research, partnerships. And on every weakness too. One of those weaknesses might be naivety. But that naivety is also what got us started. We built a proof of concept and had a fully compliant checkout running in about two weeks. "Okay," we thought, "let's figure out the compliance properly." Then the rabbit hole opened up. One thing led to the next, and three years later we're still learning.
Combining this with family life and consulting clients has been tough. But my clients are happy, I still spend a lot of time at home with my family, and the product keeps getting better. So: you're nuts, don't be naive, and just keep breathing. Start with the right mindset and surround yourself with the right people.
What's next
Vatly is in the final stretch before launch. We're handling global tax compliance, subscriptions, and billing so European SaaS founders can sell worldwide and focus on their product instead of navigating tax legislation across dozens of jurisdictions.
If you're building a SaaS in Europe and the tax compliance question keeps nagging at you, I'd love to hear from you. Find me on X or LinkedIn, or check out vatly.com.