Joshua D'Costa
Growth & Marketing
Mar 4, 2025
|
5
min
The Freelance and online gig economy has seen significant growth in the past few years. Most of the freelancers are on platforms like Fiver, Upwork, and Freelancer, where a portion of their money is taken as a commission.
According to the World Bank, 46.6% of people are self-employed and approximately 1.57 billion people in the global workforce are freelancers.
It’s clear that freelancing is no longer just a side hustle. In fact, it’s a full-blown economic movement. From graphic designers and writers to consultants and developers, with web designing being the in-demand service, freelancers are redefining how work gets done.
But while freelancing offers flexibility and independence, it also comes with its fair share of challenges especially when it comes to selling services or products online. Navigating through different tax laws and filings, compliance, payment processing, and legal liabilities can quickly become overwhelming.
What if I told you platforms like Merchant of Record (MoR) can make your life easier by handling all the tax, payment, and compliance issues at a fair price without eating into your earnings like other freelance platforms do?
In this blog, we’ll understand how an MoR simplifies these challenges, why it’s a must-have for freelancers, and how Dodo Payments is leading the charge in this space.
What is a Merchant of Record?
A Merchant of Record (MoR) is a service provider that acts as the legal entity responsible for handling transactions, taxes, and compliance on behalf of a business or in this case, a freelancer.
Essentially, it’s your financial and legal partner, taking care of the backend so you can focus on delivering exceptional work to your clients.
Key Responsibilities:
Manage transactions, refunds, and chargebacks for smooth payment processing.
Handle VAT, GST, sales tax, and other tax obligations accurately.
Ensure compliance with local, national, and international regulations.
Implement advanced fraud detection measures to safeguard transactions.
Seamlessly integrate with multiple payment gateways and scale operations as needed.
How a Merchant of Record Simplifies Operations for Freelancers
Handling Tax Filings and Compliance
Taxes are a freelancer’s worst nightmare. With clients from different countries, navigating tax laws can feel like solving a Rubik's cube blindfolded. An MoR automates tax calculations, ensures compliance, and files taxes on your behalf.
For instance, if you’re a U.S.-based freelancer working with clients in the EU, the MoR will handle VAT collection and remittance, saving you countless hours.Managing Payment Processing
Freelancers often deal with clients who prefer different payment methods like credit cards, PayPal, bank transfers, you name it. An MoR supports a wide range of payment options and currencies, making it easy to get paid no matter where your clients are located.
Plus, they handle currency conversions, so you don’t have to worry about exchange rates eating into your earnings.
Streamlined Operations
Invoicing, receipts, and financial reporting can take up a significant chunk of your time. An MoR automates these tasks, freeing you up to focus on your craft and client relationships.
Global Reach
A Merchant of Record can make it easy for you to work with clients anywhere in the world without worrying about compliance. They handle everything from local tax laws to payment regulations, so you can focus on growing your freelance business.
Reduced Liability
When dealing with international clients, An MoR assumes these risks, protecting you from potential liabilities.
Time and Cost Efficiency
Outsourcing tax and compliance tasks to an MoR saves you time and money. Instead of hiring accountants or legal experts, you can rely on your MoR to handle everything.
What to Consider When Choosing a Merchant of Record
Not all MoRs are created equal. Here’s what to keep in mind when selecting one:
Understand the fees involved, including transaction fees, monthly subscriptions, and any hidden costs.
Ensure the MoR can accommodate your needs, especially if you're in a niche field or handling high-volume transactions.
Verify that the MoR complies with data protection regulations such as GDPR and CCPA.
Look for robust security features, including encryption and secure payment gateways.
Evaluate the quality of customer support and account management offered.
Confirm the provider supports global transactions and offers multiple localized payment methods in your target regions.
Look for customization options that allow the platform to meet your specific business needs.
Assess the reporting and analytics capabilities, ensuring you have access to real-time data and insights on transactions and compliance.
Dodo Payments: The Way to Go
When it comes to Merchant of Record services, Dodo Payments stands out as a reliable and innovative solution. Ideal for freelancers, Dodo Payments offers:
Comprehensive global tax and payment support by automating tax calculations, filings, and international payment processing, ensuring full compliance.
It secures every transaction with PCI DSS compliance and state-of-the-art fraud detection, protecting sensitive patient and financial data.
The platform offers over 25 localized payment options tailored to meet regional consumer preferences, boosting conversion rates with trusted, familiar payment methods.
Dodo Payments also delivers real-time analytics and reporting tools that empower businesses to make data-driven decisions.
Additionally, 24/7 customer support is available to resolve issues promptly, enhancing overall user satisfaction.
Conclusion
The Freelance business is full of opportunities, but navigating the complexities of selling services online can be overwhelming. Choosing the right Merchant of Record like Dodo Payments can simplify the process, handling everything from tax compliance to payment processing.
Take your freelance business to the next level with Dodo Payments today and see how it can transform the way you work.
