A Merchant of Record (MoR) handles payment processing, taxes, and compliance. See the benefits of MoR and how it compares to other payment models.
Author: Umar Syed
Selling online sounds simple, but behind every sale is a lot happening that most people don’t see. Who collects the payment? Who makes sure taxes are handled correctly? What happens if a customer wants a refund? If these questions have crossed your mind, you are about to discover the important role of a Merchant of Record, or MoR.
The MoR takes care of all tricky parts like managing payments, following different tax laws, and handling refunds or disputes. This lets the actual seller focus on delivering great products and services while the MoR handles the rest. Keep reading to understand how this hidden player makes online selling easier, safer, and ready to grow worldwide.
A Merchant of Record, or MoR, is the legal entity that sells goods or services to a customer. This means it’s the official party responsible for processing the payment, managing taxes, and handling all the rules around selling. The MoR also deals with refunds, chargebacks, and any disputes that might come up after a sale.
Sometimes, the business selling the product is its own MoR. But many companies choose to let a third-party service act as the MoR to take on all the complicated parts of selling, especially when selling internationally. This setup helps simplify payments (both domestic and international payments), keeps everything compliant with tax laws, and protects the seller from financial risks. So, whenever you buy something online, the MoR is the one making sure the transaction follows all the rules and goes smoothly.
Once you understand what a Merchant of Record (MoR) is, the next step is to see how the Merchant of Record model works in real life. When a customer makes a purchase, the MoR stands as the official seller. This means the MoR is the one who processes the payment and takes responsibility for all the rules and requirements that come with selling.
Here’s what the MoR handles during each transaction:
To put it in perspective, the global Merchant of Record software market grew from USD 11.61 billion in 2024 to USD 13.20 billion in 2025. It’s expected to keep growing at a rate of nearly 15% a year and reach USD 26.29 billion by 2030. This rapid growth shows just how much businesses value the MoR model for handling complex sales and expanding globally.
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A Seller of Record is the company or person who owns the product or service being sold. They decide the prices, manage inventory or access, and handle order fulfillment and customer support. The Seller of Record ensures that customers actually get what they paid for and keep the overall buying experience running smoothly. With that said, here’s a quick difference between a Merchant of Record and Seller of Record, especially when accepting payments and managing global transactions.
| Feature | Merchant of Record (MoR) | Seller of Record (SoR) |
|---|---|---|
| Accept Payments | Yes, handles full payment processing | No, recognized as the seller to the end customer |
| Manages Global Compliance | Yes, MoR is responsible for taxes, VAT, and cross-border rules | Rarely responsible for international compliance |
| Shows on Customer’s Credit Card | Merchant of Record's name appears on statements | Usually not shown |
| Controls Price & Inventory | No | Yes |
| Sets Pricing | No | Yes |
| Fulfills Orders | No | Yes |
| Handles Refunds & Chargebacks | Yes, manages payment disputes | Assists with product-related issues |
| Legal Liability | MoR legally liable for payment compliance | SoR liable for product quality and delivery |
| Customer Support Role | Handles payment issues & disputes | Handles product questions & support |
| Best for SaaS Companies | Simplifies global payments and compliance | Controls product access and experience |
| Platform Integration | Integrates with multiple payment gateways | Integrates with order and inventory systems |
| Responsible for Tax Reporting | Yes | Generally, no. |
| Risk Management | Manages fraud, chargebacks, financial and legal risks | Addresses operational risk and fulfillment |
Market experts says that the world of online sales is growing faster than ever, with global e-commerce expected to hit over $6.4 trillion in 2025 according to Shopify. That means millions of businesses are looking for reliable ways to handle payments and compliance without headaches. Using an E commerce MoR is one of the best solutions for this. Below are ten strong reasons to use a merchant record for your business and keep everything running steady as you grow.
1. Simplify Global Tax Compliance
MoRs handle all the VAT requirements, local and global tax regulations, so you don't have to worry about different countries’ laws as you expand internationally.
2. Reduce Payment Risks
Payment fraud is on the rise worldwide, with losses surpassing $12.5 billion in 2024 (FTC). MoRs offer advanced fraud detection and help manage chargebacks to protect your revenue.
3. Make Entering New Markets Easier
With support for local payment methods and currencies built in, an Merchant of Record can help you start selling in new countries faster and without surprises.
4. Save Time and Resources
By outsourcing payments and compliance, companies can focus on their core business, like improving products, marketing, and customer service, instead of handling complex backend processes.
5. Increase Customer Trust and Satisfaction
Offering localized checkout experiences with trusted payment options reduces cart abandonment and improves overall customer happiness.
6. Handle Refunds Fast and Smoothly
MoRs take care of refund and dispute processes directly, saving your team from stressful back-and-forths.
7. Simplify Accounting and Cash Flow
Merchant of Record simplifies transactions, tax management and sends clean payouts, making bookkeeping and forecasting easier.
8. Access More Payment Options
Customers get to pay their way via credit cards, digital wallets, bank transfers, and more.
9. Protect Your Relationship with Payment Processors
MoRs stand between your business and payment providers, shielding you from sudden account freezes or disruptions.
10. Get Valuable Sales Insights
Detailed transaction data from MoRs helps you understand buyer behavior and improves your growth strategy.
If sales are the heart of your business, then keeping every customer call organized and tracked is crucial. Managing sales calls with the best call management software helps boost sales revenue. Get our Qoli – Call Management App to manage all your sales calls & recordings in one place, so nothing slips through the cracks. Pairing Qoli with your Merchant of Record setup means you not only handle payments and compliance well but also boost your sales with smarter call management.
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When it comes to handling payments, taxes, and all the tricky processes that come with selling online globally, picking the right Merchant of Record service provider can make all the difference. There are a few names that keep coming up since their reliable MoR services make this entire process easier for businesses of all sizes.
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When choosing an MoR provider, consider your business size, customer base, and global footprint to find the best fit for your needs.
It’s especially useful if your business falls into one of these categories:
A merchant is a person or business that sells goods or services to customers. They are responsible for managing the sale, including displaying products, setting prices, and completing the transaction. Merchants can sell in physical stores or online.
Follow this 7-step process to register as a merchant:
1. Register Your Business
Make your business official by registering it with your local government. This includes getting any required licenses or permits.
2. Get a Tax ID Number
Apply for a tax identification number (like an EIN) to handle taxes and open bank accounts.
3. Open a Business Bank Account
Set up a separate bank account in your business name to manage your sales money.
4. Choose a Payment Processor
Pick a payment service like Stripe, PayPal, or a bank that supports credit and debit card payments.
5. Apply for a Merchant Account
Complete an application with your chosen payment provider to get a merchant account that lets you accept payments.
6. Submit Required Documents
Provide paperwork like your business license, ID proof, and bank details to verify your business identity.
7. Integrate and Test Payments
Connect the payment system to your website or store and run some test transactions before going live.
That's all for now, selling online might seem simple, but there are many behind-the-scenes details that can get tricky fast. A Merchant of Record takes care of those tricky parts like payments, taxes, refunds, and compliance, so you don’t have to. They handle the complex stuff that comes with selling globally, making the whole process smoother and safer.
Whether you’re a small business or scaling internationally, having a reliable MoR can protect you from risks and free you up to focus on your products and customers. It’s a smart move to grow your business confidently without getting bogged down in paperwork or payment headaches.
Thank you for reading!
