Merchant of Record

Table of Contents

    Merchant of Record 

    Discover more about the up-and-coming payment trend – Merchant of record. Find out more about how it works and if it could be helpful to your business.



    What is a merchant of record?

    A merchant of record is an online platform that can take responsibility for a company’s payments and finances when requested. When accepting online payment methods such as credit and debit cards, a merchant of record can take on the liability of all the various transactions and processes that come with that. This includes collecting sales tax, processing refunds, anti-fraudulence, and ensuring PCI compliance.



    Why is a merchant of record so popular?

    As more and more people learn about merchants of records, the more that their benefits are being noted. Merchants of record can be used in a variety of industries to make the process of payments and taxes just that much more bearable.

    It is of course possible to conduct the various processes and transactions yourself (as has been done for many years), however, thanks to new technologies, a merchant of record can take care of all of this for you. This leaves you much more stress-free and gives you plenty more time to focus on other, less tedious things within your business.

    Some examples of companies that can really benefit from a merchant of records include SaaS companies, e-commerce companies, and sellers of downloadable goods.



    How does Merchant of records work?

    In short, a merchant of record collects money on your behalf. Customers will still ‘purchase’ your goods from your website, but will receive a receipt from your merchant of record. This is how the merchant of record becomes liable for sales taxes, refunds, and so on.

    A merchant of records checkout is already optimized for all scenarios. They collect the VAT number, and billing address and apply the correct tax rate for business/private customers no matter what country they are in.



    Merchant of record vs payment gateway provider

    A merchant of record is an entity that will take care of the transactions and processes that come after a customer makes a purchase. A payment gateway provider, on the other hand, is there to make the process of completing the payment easy for you.

    A payment gateway provider provides you with the most convenient way to accept all payments from all around the world in real-time.

    Payment gateway providers offer an all-in-one platform where you can monitor and log all your payments. They also offer the best and easiest ways to accept payments from your customers, via your website, a payment page, a payment link, or a QR code. You can also use a payment gateway provider to manage subscriptions!



    Merchant of Record companies

    merchant of record (MoR) is a complex and new service, which is why only startups are offering this service and not big payment providers like Stripe or Paypal.

    Companies that offer Merchant of Record:

    • FastSpring
    • Paddle
    • Gumroad

    Advice needed to find a Merchant of Record?

    You can always contact PayRequest if you want more information about our Merchant of Record.

    We have partnered with the leading secure payment gateways, and help you set up a merchant-of-record experience for your users.