Give me 5 Tips To Choose a Merchant Of Record Model

3 minutes

Hi there, and welcome to our “Give me 5 Series!” where we share five useful eCommerce tips that will help improve your strategies and pave your way to success. 

In our newest episode, Nataliya Shadykulova , Head of Digital Sales, EMEA and Asia at 2Checkout (now Verifone), talked about five key reasons why a partnership with a Merchant of Record is an optimal solution to running a global online business.

A Merchant of Record, also known as a reseller, is the entity who mediates the selling of products or services to the final customers, taking on the legal responsibility for financial aspects like payments, billing, invoicing, taxes, and so on.

Here are five reasons why partnering with a Merchant of Record can provide the commerce support needed to scale across borders:



1. Guaranteed Compliance

From a security viewpoint, by using an MOR, you outsource the full liability for laws and regulations when expanding to new markets. Why? Because the reseller takes on the responsibility to examine financial or private-law norms in the country you’re selling into. This compliance guarantee takes the pressure off any business owner in terms of shared responsibility, freeing their focus for other business development areas. PCI compliance, for example, a mandatory requirement for all businesses accepting online card payments, is fully taken on by the MoR in such partnerships.


2. One-Stop Solution to Multiple Problems

When you have a business to oversee, there are many aspects of the digital sale flow that need constant monitoring and tweaking. That’s where a Merchant of Record helps in the following situations:

  • tax calculation
  • integrating multiple payment methods
  • paying different fees and commissions
  • dealing with consumer or business regulations
  • handling currency conversion
  • settling disputes, refunds, and chargebacks
  • and preventing online fraud.


3. Entry Into Global Markets

A Merchant of Record is the one to take care of localizing the checkout experience, as it provides the preferred payment methods and billing currency, while improving the overall experience customized for your customers. Beyond that, you can always count on a Merchant of Record to do the groundwork for your business-customer relationship. For instance, most MoR providers offer 24×7 end-customer support for payment and order-related issues, usually in multiple languages, via more channels – email as a minimum, or even phone or chat.


4. Cost Saving Benefits

If you have a global business with a wider customer base you need to be attentive to your cost assigning process. A Merchant of Record takes on the responsibility for multiple back-office operations, managing different areas such as payment gateways, local taxes, payment processing, and more.

An added benefit on the cost and profitability sides is the higher payment acceptance rates a reseller can get for your transactions, when compared to a PSP. Given that an MoR works with local acquirers, your cross-border payments are routed through local payment gateways, which ensure a higher rate of successful authorizations.


5. Local entity creation

Creating local entities to facilitate tax registration and payment connections, among other things, is key when expanding to new markets. However, this process can be very expensive and time-consuming, taking up to two years to set up. Furthermore, if you want several merchant accounts, you will need to search for merchant management software or manually handle payments across various dashboards. This is where a Merchant of Record comes in and saves the day, so you won’t have to worry about the hassle of opening and managing local entities.


To sum up, finding the right Merchant of Record provider can make the world of business ownership a little easier.

Thank you so much for watching! If you have any questions and suggestions, feel free to share them in the comments below. We wish you good luck and see you next time for more useful eCommerce tips!


Check out our previous “Give me 5!” episode here to discover the five best practices that will help you achieve high authorization rates.





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