# How does a Merchant of Record cut Health tech Risks > Discover how HealthTech companies use a Merchant of Record to reduce compliance risk, secure payments, and scale internationally with confidence. - **Author**: Joshua D'Costa - **Published**: 2025-02-27 - **Category**: Merchant of Record, Tax & Compliance - **URL**: https://dodopayments.com/blogs/merchant-of-record-healthtech --- A Merchant of Record cuts HealthTech risk by taking on the seller-side obligations of every cross-border sale: tax calculation and remittance, PCI DSS scope, fraud screening and dispute handling. What it does not do is absolve you of HIPAA or GDPR duties for the patient data inside your product, and that distinction is where most teams get the model wrong. The health tech industry has been growing steadily, driven by advances in e-health, wearable devices, AI diagnostics, and digital health platforms. Digital health revenue has been forecast to grow from roughly US$197.88 billion to around US$258.25 billion by 2029, at about a 6.88% annual rate. Yet, global expansion isn't without its challenges. Health tech companies often struggle with tax regulations and the need for secure payment processing, which can hinder scaling efforts. For those looking to reach new markets without the heavy operational burden, [a Merchant of Record (MoR)](https://dodopayments.com/payments/merchant-of-record) offers, simplified international transactions and ensures compliance at every step. ## Health Tech and Global Expansion Challenges 1. **Legal Complexity** > Most SaaS founders underestimate the cost of tax compliance. It is not just filing returns. It is registration, calculation at checkout, remittance, and audit readiness across every jurisdiction where you have customers. > > \- Ayush Agarwal, Co-founder & CPTO at Dodo Payments Health tech companies must comply with stringent regulations like HIPAA (Health Insurance Portability and Accountability Act) in the U.S., GDPR (General Data Protection Regulation) in the EU, and other regional healthcare laws. Non-compliance with HIPAA can result in fines ranging from $100 to $50,000 per violation, with an annual maximum of $1.5 million for identical violations. These regulations govern how patient data is collected, stored, and shared, adding layers of complexity to global operations. 2. **Payment Processing Challenges** Health tech companies often deal with sensitive patient data and financial information, requiring secure and compliant payment processing. Additionally, global expansion introduces challenges like: - Managing multiple payment methods (credit cards, digital wallets, etc.). - Handling currency conversions and cross-border transactions. - Complying with regional tax laws and reporting requirements. 3. **Operational Overhead** Building in-house teams to manage compliance, taxes, and payments can be costly and time-consuming. For small and mid-sized health tech companies, this operational burden can divert resources from core activities like product development and innovation. 4. **Fraud and Security Risks** Healthcare is one of the most heavily targeted sectors for ransomware and data theft, because patient records are both valuable and hard to re-issue. Keeping card data out of your own systems narrows the attack surface considerably, which is one practical argument for using a PCI DSS Level 1 certified provider rather than storing payment credentials yourself. 5. **Customer Experience** Providing a seamless payment experience is essential for improving efficiency, reducing administrative workload, and ensuring that patients receive timely care. Specialist billing tools exist for particular niches, such as ABA providers, and general-purpose billing platforms cover the rest. These solutions ensure accurate billing, automate payment tracking, and provide detailed financial reporting, allowing providers to focus on delivering high-quality care without the burden of managing complex billing tasks. However, global expansion often leads to payment friction, such as declined transactions or lack of preferred payment methods, which can deter users. ## How an MoR Helps Health Tech Companies Scale Globally A Merchant of Record (MoR) becomes the reseller of record for your sales, taking legal responsibility for processing payments, calculating and remitting taxes, and meeting the seller-side regulatory requirements in each market. For health tech companies that removes the largest single blocker to entering a new country. The [merchant of record documentation](https://docs.dodopayments.com/features/mor-introduction) sets out precisely which obligations transfer. 1. **Simplifies Tax and Compliance** An MoR takes over transaction-level tax obligations, calculating VAT, GST and US sales tax at checkout and remitting them across 190+ countries. Be clear about the boundary: it handles the sale, not your clinical data obligations. HIPAA and GDPR responsibilities for patient records stay with you, and you still need a business associate agreement or data processing agreement with any vendor that touches protected health information. 2. **Streamlines Payment Processing** An MoR supports multiple payment methods and currencies, enabling health tech companies to accept payments from customers worldwide. It also provides secure, PCI DSS-compliant payment processing to protect sensitive data. 3. **Reduces Operational Burden** By handling end-to-end payment and compliance tasks, an MoR eliminates the need for in-house teams, reducing operational costs and freeing up resources for core business activities. 4. **Enhances Security and Fraud Prevention** An MoR implements advanced fraud detection and prevention measures, safeguarding transactions and protecting against data breaches. 5. **Improves Customer Experience** An MoR ensures seamless, localized payment experiences for users worldwide, reducing payment friction and improving customer satisfaction. ## Features to Look for in a Merchant of Record for Health Tech When choosing an MoR, health tech companies should look for the following features: 1. **Global Tax and Payment Support** - Handles tax calculations, filings, and payment processing for multiple countries. - Ensures compliance with regional tax laws and healthcare regulations. 2. **Secure Payment Operations** - Provides **PCI DSS** compliance and advanced fraud detection. - Protects sensitive patient and financial data. 3. **Localized Payment Options** - Offers region-specific payment methods tailored to local consumer preferences. - Boosts conversion rates by providing familiar, trusted payment options for patients and customers in each market 4. **Subscription Management** - Supports recurring billing for SaaS-based health tech solutions. - Manages subscriptions, upgrades, and downgrades seamlessly. 5. **Scalability** - Adapts to the growing needs of health tech companies as they expand globally. - Supports increasing transaction volumes and new market entries. ## Why Dodo Payments is the Best Option for Health Tech Here's why Dodo Payments is the right choice for your HealthTech Business; - Tax calculation, filing and reporting across 190+ countries is included at no extra cost, covering VAT, GST and US sales tax on every cross-border sale. Your own healthcare-specific obligations remain yours. - Secure transactions through [PCI DSS Level 1 certification](https://dodopayments.com/payments/merchant-of-record) and built-in fraud detection, which keeps cardholder data out of your application entirely. - Provides [40+ local payment methods](https://dodopayments.com/payments/local-payment-methods) across 220+ countries and territories and 80+ currencies, helping conversion by offering the options patients already trust in each market. - Handles [subscription billing](https://dodopayments.com/billing/subscriptions) including recurring charges, upgrades, downgrades and dunning for failed renewals, with revenue recovery free to enable and 5% charged only on revenue actually recovered. For a broader view of where the model fits across industries, see [merchant of record use cases](https://dodopayments.com/blogs/merchant-of-record-use-cases). ## FAQ ### Why is a Merchant of Record important for HealthTech expansion? HealthTech companies face strict payment, tax, and compliance obligations across regions, which can slow growth. An MoR centralizes these requirements so teams can focus on patient and product outcomes. ### Can an MoR support HealthTech subscription billing models? Yes, most MoR platforms support recurring billing, plan changes, and subscription lifecycle events for SaaS-style health products. This helps maintain compliant billing operations as usage scales. ### How does an MoR improve payment security for HealthTech? An MoR usually provides PCI-compliant payment infrastructure, fraud detection systems, and dispute operations. That reduces exposure to common payment risks while improving transaction reliability. ### Does a Merchant of Record replace HIPAA and GDPR responsibilities? It helps with transaction-side compliance and reduces operational burden, but your company still owns product-level data handling obligations. You should treat an MoR as a compliance partner, not a complete legal substitute. ## Final Thoughts The health tech industry is destined for massive growth, but global expansion comes with significant challenges. From navigating complex regulations to ensuring secure payment processing, health tech companies need a reliable partner to help them scale efficiently. [A Merchant of Record (MoR)](https://dodopayments.com/payments/merchant-of-record) simplifies tax and compliance, streamlines payment processing, and enhances security. This allows health tech companies to focus on what they do best: Improving patient outcomes through innovation. If you're a health tech company looking to scale globally, consider partnering with a Merchant of Record like [Dodo Payments](https://dodopayments.com/) and achieve sustainable growth. --- - [More Merchant of Record articles](https://dodopayments.com/blogs/category/merchant-of-record) - [All articles](https://dodopayments.com/blogs)