Merchant of Record Guide 2025: Everything You Need to Know
Expanding a digital business across borders is exciting – but it also brings complexity. From managing taxes and payments to ensuring compliance with local laws, global growth often comes with hidden operational and legal hurdles.
That’s where the Merchant of Record (MoR) model comes in.
In this comprehensive 2025 guide, you’ll learn what a Merchant of Record is, how it works, and how it enables digital businesses to scale globally faster and safer.
What is a Merchant of Record?
Key responsibilities of an MoR:
- Processing payments under its legal entity
- Collecting and remitting local taxes (VAT, GST, etc.)
- Ensuring compliance with global and local regulations (GDPR, PSD2, PCI DSS, etc)
- Managing refunds, chargebacks and fraud prevention
- Providing localized checkout experiences and payment options
How Does a Merchant of Record Work?
A Merchant of Record (MoR) acts as the intermediary between your business and your customers, handling payments, taxes, and compliance on your behalf.
When a customer buys from your website:
- The MoR processes the payment securely in the customer’s currency
- It applies local taxes and ensures compliance with regional regulations
- It manages refunds, disputes, and chargebacks, removing operational burden from your team
With the Merchant of Record model, your brand stays front and center, providing a seamless, localized customer experience. The MoR only appears on the payment statement, letting your company scale globally quickly and safely without taking on cross-border complexity.
Why Companies Use the Merchant of Record Model
Scaling internationally can be complex for businesses starting with a DIY payments setup – from handling taxes and chargebacks to managing multiple payment platforms. Many digital companies turn to the MoR model to simplify operations, stay compliant, and protect growth.
By centralizing responsibilities such as payments, compliance, and fraud management, the MoR model allows companies to maintain control over their brand, products, and user experience while reducing operational burdens. How ready is your business to achieve maximum impact on a global scale?
Key benefits of partnering with a Merchant of Record:
🌍 Simplified Global Expansion
With Nexway as your MoR, you can enter new markets without setting up local entities, making international growth faster and smoother.
💰 Reduced Financial Risk
By transferring responsibilities like taxes, chargebacks, and compliance to Nexway, your business stays protected from financial exposure.
⚙️ Operational Efficiency
Nexway consolidates multiple payment systems into one streamlined platform, saving time and resources while ensuring smooth global operations.
💳 Localized Checkout Experience
Offer customers local currencies, payment methods, and optimized checkout flows to boost conversions, thanks to Nexway’s MoR solution. See how our localized payment experience works in practice.
🧾 Tax & Regulatory Compliance
Expanding globally introduces regulatory, cybersecurity, and data privacy challenges. Businesses must manage these risks while ensuring compliance with PCI DSS, PSD2, GDPR, and other international standards.
What Types of Businesses Benefit from an MoR?
A Merchant of Record is ideal for companies that want to scale internationally while minimizing operational and legal complexity:
- SaaS companies managing subscriptions globally, ensuring smooth billing and reducing churn rate by offering localized payment options and compliance
- eCommerce businesses expanding into international markets, streamlining taxes, refunds, and cross-border payments
- Digital content providers selling software, games, or media, providing seamless checkout experiences that improve customer retention
Need a Merchant of Record that supports long-term growth?
Nexway’s experts can guide your global expansion strategy.
10 Key Benefits of Using a Merchant of Record
Expanding globally requires managing complex payment, tax, and compliance processes. A Merchant of Record helps digital businesses scale faster by handling every step of the transaction lifecycle.
1️⃣ Faster Market Entry
Launch SaaS, software, or digital products in new countries without setting up local entities, legal structures, or bank accounts.
2️⃣ Localized Payments & Better Conversions
Offer local currencies, payment methods, and optimized checkout flows to build trust and reduce cart abandonment.
3️⃣ Simplified Subscription Management
Automate recurring billing, renewals, upgrades, and subscription changes while staying fully compliant across borders.
4️⃣ Real-Time Global Insights
Track sales, taxes, refunds, chargebacks, and customer data from a centralized dashboard for smarter decision-making.
5️⃣ Compliance Made Easy
Stay fully up to date with GDPR, PSD2, VAT, GST, and other local regulations, reducing fines and legal risks.
6️⃣ Scalable Growth
Expand into new markets confidently while keeping your brand, UX, and pricing strategy under control.
7️⃣ Reduced Operational Complexity
Outsource relationships with payment processors, banks, and local authorities, freeing your finance and legal teams from manual tasks.
8️⃣ Fraud & Risk Protection
Mitigate chargebacks, fraud, and payment disputes through expert monitoring and secure payment management.
9️⃣ Cost Efficiency
Avoid hiring extensive local legal, finance, or compliance teams – pay per transaction while leveraging the MoR’s global expertise.
🔟 Focus on Core Growth
Offload operational headaches to focus on product innovation.
MoR Solutions. More Growth
What’s the Difference Between a Merchant of Record and a Payment Gateway?
When expanding internationally, understanding the difference between a Payment Gateway and a Merchant of Record is critical for smooth cross-border payments and global growth. While payment gateways handle transactions, a MoR takes on legal, tax, and regulatory responsibilities, enabling faster, compliant international expansion.
| Features | Payment Gateway | Merchant of Record (MoR) |
|---|---|---|
| ⚖️ Legal responsibility |  Your business |
 MoR |
| 🧾 Tax compliance | Your responsibility |
Managed by MoR |
| 🌐 Regulatory compliance | Your responsibility |
Handled globally by MoR |
| 💳 Chargebacks & refunds | You handle |
Handled by MoR |
| 🏢 Local entity required | Often yes |
Not required |
| ⚡ Speed to market | Slower |
Fast, compliant, global |
Is Nexway a Merchant of Record?
Nexway acts as your all-in-one Merchant of Record partner, simplifying global expansion by managing payments, taxes, compliance, subscriptions, fraud, and more. With Nexway handling operational and legal complexities, your business can focus on growth, innovation, and delivering a seamless experience to customers worldwide.
Why Nexway is your long-term growth partner:
- Single Contract, Global Reach: One framework for agreements, billing, and compliance, reducing administrative overhead and accelerating market entryControl Your Brand: Keep full control of UX, products, pricing, and brand while Nexway works behind the scenes.
- Tailored Solutions: Custom integrations and workflows – no “one-size-fits-all” approach.
- Expert Guidance: Act as an extension of your international growth team with strategic support.
- Shared Success: Nexway’s growth is tied to yours, we invest in your global expansion.
Partnering with Nexway means more than working with a typical Merchant of Record. With tailored solutions, hands-on support, and global expertise, Nexway stands out from other third-party MoRs by enabling businesses to scale internationally.
Ready to see the difference in action? Request a demo today to explore how Nexway can simplify your global expansion.
FAQ
Can I Be My Own Merchant of Record?
Technically, yes – but being your own MoR comes with heavy responsibility. You would need to manage every aspect of the payment lifecycle yourself: processing payments, handling refunds and chargebacks, calculating and remitting taxes, and ensuring compliance with regulations.
For small businesses operating in a few markets, this can work – but as soon as you scale internationally, the complexity grows fast. Partnering with a professional MoR, like Nexway, lets you focus on growing your business while the MoR takes care of operational and legal headaches.
What's the difference between a Merchant of Record and a Payment Service Provider (PSP)?
A MoR is the legal seller of your product and takes full responsibility for the transaction, including payments, taxes, compliance, fraud prevention, and customer disputes.
A PSP only processes payments. The selling business remains responsible for administrative and legal obligations.
What's the difference between a Merchant of Record and a Seller of Record (SoR)?
Both handle transactions on behalf of a business, but the distinction lies in responsibility.
A MoR assumes full legal and financial responsibility, including compliance, taxes, and refunds.
A SoR simply sells on behalf of the merchant without taking on the full legal and financial obligations – the original merchant is still liable.
Is Stripe a Merchant of Record?
No. Stripe is a payment processor, not a Merchant of Record. It provides the infrastructure to accept online payments but does not take legal responsibility for taxes, compliance, chargebacks, or refunds.
If you use Stripe directly, your company remains the Merchant of Record – meaning you’re liable for all financial and regulatory obligations.