Joshua D'Costa
Growth & Marketing
Mar 10, 2025
|
5
min
An online travel platform offers a web-based marketplace, letting consumers search for and book travel services such as hotels, flights, car rentals, tours, and cruises directly from travel suppliers. These agents, companies, and sole traders play a crucial role in the travel industry by facilitating the online sale of travel services.
Globally, the Online travel market was valued at nearly $861.50 billion in 2023, growing steadily over recent years. Projections indicate that the market will reach around $1,118.29 billion by 2028 and continue to grow to approximately $1,483.31 billion by 2033.
This growth has been fueled by rising disposable incomes, rapid urbanization, increasing global population, and greater internet penetration. Looking ahead, strong economic performance, the surge in e-commerce, more smartphone users, and a rise in solo travelers are expected to drive further expansion, although regulatory constraints are posing future challenges.
Why are Merchants of Record (MoR) so critical in the travel industry? The travel industry has unique challenges that make the MoR approach increasingly attractive for both suppliers and Online Travel Agencies (OTAs). For instance, regulatory requirements, global transactions, compliance, data security, and taxation add a layer of complexity. For smaller OTAs, these administrative burdens can be particularly harsh, making the outsourcing of the merchant function highly valuable
In this blog, we’ll explore what a Merchant of Record is, why it’s essential for travel businesses, and how it can streamline operations, reduce risks, and drive growth.
Key Responsibilities of a Merchant of Record?
The Merchant of Record (MoR) handles all technical aspects of payment processing, ensuring that transactions are secure and run smoothly across various channels.
For example, an online travel agency can receive international payments without worrying about currency conversions or complicated gateway setups.It manages tax calculations and remittance for businesses operating in multiple regions, handling diverse regulations such as VAT, GST, and local taxes.
For instance, a hotel chain can depend on the MoR to meet its tax obligations for bookings across different countries.The MoR guarantees compliance with global standards like PCI DSS and regional regulations like GDPR, ensuring that customer payment data is securely managed and reducing the risk of hefty fines.
It employs advanced fraud detection and chargeback management techniques to minimize financial risks, helping to protect revenue from losses due to fraudulent transactions.
Additionally, the MoR streamlines overall payment operations, reducing administrative burdens so businesses can focus on core activities and strategic growth.
How MoR Differs from Traditional Payment Processors
While traditional payment processors focus solely on transaction processing, an MoR takes on a broader role. It acts as the legal entity responsible for the transaction, handling compliance, taxes, and customer disputes. This end-to-end approach makes the MoR a valuable partner for travel businesses.
Benefits of a Merchant of Record for Travel Companies
Payment Methods
It simplifies global transactions by supporting a wide range of payment options, from international credit cards to local payment systems. This ensures that travel agencies can cater to customers worldwide, offering the flexibility to pay in their local currency and preferred method, which in turn can boost conversion rates and enhance customer satisfaction.
Chargeback Management
When you have a right Merchant of Record, chargeback handling becomes effortless. The service takes care of advanced fraud detection, dispute resolution, and efficient management of refund requests, reducing financial risks for online travel companies.
Cost and Time Efficiency
By outsourcing payment management to an MoR, travel businesses can save time and resources that would otherwise be spent on in-house payment systems and compliance teams.
Scalability for Growth
As travel businesses expand into new markets, the MoR scales with them, managing increased transaction volumes and ensuring compliance in new regions.
Improved Financial Visibility
The Merchant of Record provides detailed reporting and analytics, offering insights into revenue, customer behavior, and transaction trends. This data-driven approach enables better decision-making.
How a Merchant of Record Works in the Travel Industry
(Step-by-Step Process)
Integration: The Merchant of Record integrates with the travel company’s booking or reservation platform, like its website and mobile app, to enable seamless payments.
Transaction Handling: A Travel agency or a hotel chain uses the MoR to handle payments for room bookings, ensuring taxes are calculated accurately for each region.
Reporting and Analytics: The MoR delivers insights into revenue, customer behavior, and transaction trends by identifying popular payment methods and optimising its offerings.
Ongoing Support: The MoR also resolves payment-related issues, and provides customer assistance.
Choosing the Right Merchant of Record for Your Travel Business
Here’s why Dodo Payments is the right choice for your Online Travel Business;
It offers robust global tax and payment support by managing tax calculations, filings, and international payment processing to ensure full compliance with regional tax laws and healthcare regulations.
It ensures secure transactions through PCI DSS compliance and advanced fraud detection, protecting sensitive patient and financial data.
Provides 25+ localized payment options tailored to regional consumer preferences, helping to boost conversion rates by using familiar, trusted payment methods.
Efficiently handles subscription management, supporting recurring billing and seamless management of upgrades or downgrades for SaaS-based health tech solutions.
Conclusion
In the highly regulated travel industry, the Merchant of Record model benefits in several ways. They can offer a wider variety of benefits in a single, user-friendly platform that minimizes friction during booking.
Additionally, having the MoR handle payments enhances protection, thanks to robust refund policies, cancellation options, and dedicated customer support, which boosts traveler confidence and trust. Enhanced fraud prevention measures further secure customer data, ensuring that travelers’ financial information is well protected.
The capabilities of a Merchant of Record can bring Travel agencies and suppliers together, streamlining payment management and creating a superior traveler experience.
Simplify your payment operations and explore how a Merchant of Record can transform your travel business today!
