What is a Merchant of Record? Everything Business Owners Need to Know

Accepting online payments is more challenging than many people think. Aside from setting up the payment gateway itself, businesses are continually jumping through hoops to protect themselves and their customers from fraud while avoiding profit-killing chargebacks.

Many business owners are finding favor with Merchant of Record services that remove the liability and guesswork out of accepting online payments. The result: a safer, simpler way to process transactions and boost profits in the process.

Merchant of Record Definition

A Merchant of Record (MoR) is an entity who is authorized to process consumer credit card and debit card purchases on behalf of a business. The MoR assumes all liability concerning the payment processing, including maintaining compliance with tax laws and taking steps to prevent fraud.

How the MoR Model Works

In order to process credit card payments on your e-commerce website, you must have a merchant account. Obtaining a merchant account on your own can be a lengthy, tedious process filled with risks. Not everyone will qualify for a merchant account, as things like credit score and business history are part of the application process.

Instead, many business owners will seek the services of a Merchant of Record who has already built relationships with financial institutions and assumes the liability of processing payments.

In the MoR model, the MoR has already established a good working relationship with banks and payment processors. Rather than act as your own MoR, you use an MoR service provider that will process payments on your behalf.

When customers make a purchase from you, two transactions occur: one between your MoR and your customer and one between your MoR and the bank. The MoR receives a portion of the transaction to cover the required taxes and fees, and the rest goes to your business with no further financial action required.

Chargebacks, processing fees, and refunds become the responsibilities of the MoR, giving businesses a worry-free approach to their finances.

Exploring Merchant of Record Benefits

Aside from the hands-free option to payment processing, using an MoR provides a myriad of other benefits:

One Solution for Multiple Problems

Payment processing is filled with small complexities, such as handling multiple payment methods, calculating the right taxes, and paying several different fees. MoRs take control of these issues so you can skip the hassle.

Guaranteed Compliance

MoRs make it a point to stay on top of the financial industry and implement changes to compliance. Knowing that any changes are taken care of for you can be a big relief to busy businesses.

Easier Entry into Global Markets

Providing global customer experiences is no longer a struggle with a MoR. You don’t have to worry about currency conversion or foreign compliance in order to win over customers outside of your market, giving you unlimited potential to grow your business.

Where to Find Merchant of Record Services

The way we buy and sell online is continually shifting, particularly as merchants and customers alike expect simpler and more secure payment options. If you aren’t using a Merchant of Record service, you’re acting as your own MoR and assuming all the risks and responsibilities that come with it — a feat that could easily become a full time job in itself.

Gapp Merchant of Record service gives you the peace of mind that your customers transactions are handled appropriately, along with decades of tax and billing expertise. We help you stop fraud in its tracks, maintain compliance, and take a hands-off approach to online payments, so you can get back to what you do best.


Contact us today and discover how an MoR can help you sell better, earn more, and win big!