Merchant of Record In Philippines
Joshua D'Costa
Growth & Marketing
Aug 8, 2025
|
5
min
In 2024, the Philippines’ tech startups secured $245 million in funding. A 67 percent leap from the previous year. The digital economy spanning e-commerce, cloud services, and fintech has expanded rapidly. Digital payment adoption has climbed to 57.4 percent of all retail transactions in 2024 up from 52.8 percent in 2023, amounting to $136 billion processed each month.
Philippine startups enjoy a booming home market and rising global demand, but payment infrastructure can make or break their international ambitions. Cross-border sales bring taxes, currency conversion hurdles, and multiple payment methods. Without local options like credit cards, e-wallets, bank transfers or a reliable way to manage tax obligations, customers drop off at checkout. Noncompliance with BSP or BIR regulations, such as the 2025 requirement for a 12 percent VAT on digital services, exposes businesses to fines.
It’s no wonder businesses are looking for solutions that can tackle it all. In this blog, we’ll explore how a Merchant of Record (MoR) eliminates these barriers
Philippine Payment Landscape
The Philippines has a rich local payments ecosystem, but it’s mostly built for domestic spending.
GCash is king. It serves about 94M Filipinos on its platform with 6 million merchants.
Maya (formerly PayMaya) is second with about 50M users and was the top Visa merchant acquirer in 2024.
These mobile wallets and their networks including partner outlets and QR payments make it easy for local customers to pay in pesos.
Dragonpay, a pioneer e-payments company, offers over 85 channels and 35,500 partner branches (bank over-the-counter, e-wallet top-ups, etc.) and has processed 400+ million transactions for Philippine merchants.
Strengths of local PSPs: GCash and Maya work with local banks and governments, offering QR PH payments and instant bank transfers via Peso
cash is still preferred by many, but e‑wallet use has already exceeded 60%. Philippine digital transactions have climbed year after year, helping the BSP meet its 2024 target of 50–54% digital retail payments; the share hit 57.4% by volume.
Limitations and pain points: These local systems don’t serve international buyers. Foreign customers can’t pay with GCash or Dragonpay outside the Philippines. And for companies selling abroad, aggregating revenue from multiple local PSPs is a headache.
Startups face manual reconciliation and FX risk if they collect in USD or other currencies and then convert to PHP. Regulatory compliance is also fragmented: each PSP issues different receipts/invoices, and none automatically accounts for cross-border tax.
Why Stripe and PayPal Fall Short in the Philippines
Global payment giants like Stripe are not completely available in the Philippines, only if you incorporate in the UK or operate via sister companies.
PayPal is widely used, but Philippine sellers report conservative risk management: strict holds and fees on currency conversion.
Sellers might accept USD payments via Stripe/PayPal but then must handle foreign exchange and delays to transfer money to a Philippine bank. There are also regulatory constraints. The Philippine BSP and BIR require payment services to have local authorization if they handle peso transactions or e-money. PayPal and Stripe thus partner with local banks or operate via sister companies, adding complexity and occasional service restrictions.
In short, startups using only Stripe/PayPal often face higher friction and cost than if they used a Merchant of Record that accepts local methods and currencies directly.
Benefits of a Merchant of Record for Philippine SaaS/AI Teams
1. Global payment coverage:
An MoR lets you tap the world’s preferred payment methods all at once. Rather than integrating dozens of gateways, you use one platform that already works with Visa, Mastercard, JCB, and even regional wallets. This typically boosts conversion.
2. Automated tax/VAT handling:
MoRs calculate and remit all applicable sales taxes be it Philippine VAT or EU VAT/GST on each transaction. The Philippine BIR now requires foreign digital service providers to register and pay 12% VAT on Philippine sales.
A good MoR will automatically charge the correct VAT/GST based on buyer location and file the returns. You no longer need to manually track each country’s tax rules.
3. Unified dashboard and reporting:
An MoR can provide a single dashboard showing all transactions, settlements, chargebacks, and analytics.
It often offers built-in invoicing in local currencies, detailed finance reports, and real-time reconciliation. This removes the tedium of matching dozens of bank deposits and manual spreadsheets.
4. Regulatory compliance and risk management:
The MoR is responsible for being properly licensed. These platforms operate with the necessary BSP payment licenses and PCI compliance. They also assume liability for fraud and chargebacks, to an extent – a big weight off a small team’s shoulders.
Essentially, the MoR handles cross-border legalities, de-risks global expansion. You can price in multiple currencies, accept local payment forms, and automatically comply with local tax and data rules.
Dodo Payments as Your Merchant of Record Partner
Dodo Payments as a Full-Stack Merchant of Record platform catering to SaaS/online businesses. It provides;
Robust APIs, SDKs, and webhooks automate billing and reporting, so you can integrate payments into your app or website without heavy lifting.
Operating in 150+ countries with 30+ local payment methods and multi-currency payouts, Dodo Payments lets Philippine startups collect global payments in pesos or remit dollars and euros through one integration.
It automates tax compliance, issuing VAT/GST-compliant invoices, filing returns with BIR or overseas authorities and handles subscriptions and one-time invoices by dashboard or API.
In Summary
Local processors offer reach in the Philippines, but cannot alone handle global sales. Global PSPs ease onboarding, but can leave you facing currency issues, manual tax filings and payout headaches. A Merchant of Record bridges these gaps by localizing payments everywhere.
Dodo Payments as your Merchant of Record, you can overcome the challenges of cross-border payments, taxes, and regulatory compliance. Our platform is designed to help businesses thrive in the global market, offering seamless payments, reliable payouts, and hassle-free tax handling.
