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Merchant of Record - The new payment trend

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 of a company’s payments and finances when requested. When accepting online payment methods such as credit and debit card, 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 are merchant of records so popular?

As more and more poeple 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 form a merchant of records include SaaS companies, e-commerce companies and sellers of downloadable goods.

Merchant of records - how does it 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, 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 customers 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 realtime.

Payment gateway providers offer an all-in-one platform where you can monitor your 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, payment link, or QR code. You can also use a payment gateway provider to manage subscriptions!

Find out more about Netherlands payment gateway providers here!

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