Merchant of Record (MoR)

What is the Merchant of Record?

Merchant of record (MoR) is a company or a legal entity that handles the payment process and acts as a third party between the buyer and seller.

MoR takes responsibility for the payment process on behalf of other businesses and not just that but it takes care of everything related to sales, tax handling and makes sure all transactions follow the law.

For Example: If you are a solopreneur selling a digital product internationally, calculating taxes of different countries, handling payments and following all the tax laws can be time-consuming and let’s be real; quite confusing.

That’s where MoR comes into the picture, the merchant of record will handle all the payment process, take care of the taxes (like VAT or GST) and make sure tax laws are followed.

This way you don't have to worry about any legal issues related to international transactions because MOR takes care of it.

How does Merchant of Record work?

The way MOR works is quite simple,

The customer goes to an online store and decides to buy your product. they add it to their cart and proceed to checkout.
when the customer checks out with the product, MOR takes over. It collects the payment from the customer using secured methods like credit or debit cards, e-wallet etc.
MOR will collect any tax required from the customer depending on their country and add it to the customer’s final price for the final payment.
To protect the business from legal issues the MoR handles all the tax and regulatory requirements like data protection and takes care of tax laws depending on the customer’s location.
The MOR sends a purchase receipt to the customer in case there are any issues with the payment. The customer can contact MOR customer service.