As is the nature of online businesses, many are international by default. Global reach opens up access to a much larger audience and more opportunity to scale but also adds some hidden complexity, especially when it comes to payments. At Trustap, we act as a Merchant of Record (MoR) to simplify that complexity.
For many, ‘Merchant of Record’ is a new phrase, so let’s dive into exactly what that means and why it matters!
What Is a Merchant of Record (MoR)?
A Merchant of Record is the legal entity responsible for processing customer payments and carrying all associated risks. This includes:
- Collecting and remitting taxes
- Handling chargebacks and disputes
- Ensuring PCI compliance and fraud checks
- Generating and managing receipts/invoices
- Managing refunds and cancellations
In short, an MoR assumes full liability for the transaction. This is particularly critical for businesses selling products or services across different regions, where local regulations, tax requirements and compliance laws can vary dramatically. Crucially, it also insulates businesses from losses stemming from fraud & chargebacks.
How Does the Merchant of Record Model Work at Trustap?
Trustap acts as the MoR in each transaction carried out through our platform. Here’s what that means in practical terms:
- End-to-End Transaction Management: We handle the entire transaction lifecycle from buyer payment to seller payout, ensuring a seamless experience for both parties.
- Assumption of Financial Risk: If there’s a dispute, chargeback or fraud, we fight this on your behalf and assume the financial risk involved.
- Regulatory Compliance Made Easy: Trustap ensures that each transaction complies with relevant regulations, such as VAT in the EU or sales tax in the USA.
- Global Reach Without the Headache: You don’t need to register in every country or worry about evolving tax laws, that’s all handled by Trustap as your Merchant of Record.
Who Benefits from Using a Merchant of Record?
MoR services are valuable for a wide range of online businesses, but they’re especially impactful for:
- Marketplaces and platform businesses that facilitate transactions between third parties
- E-commerce businesses that want to sell internationally without the usual complexity
- SaaS providers offering subscriptions globally
Essentially, if you’re selling, specifically across regions, and want to avoid the burdens and operational headaches of financial and regulatory administration, an MoR is a powerful partner.
Can You Operate Without an MoR?
Yes, though it does come with more risks and can be more time intensive. If you choose to be your own Merchant of Record, you’ll be responsible for:
- Managing tax registration and remittance in each jurisdiction.
- Handling disputes, refunds, and chargebacks.
- Ensuring data privacy and PCI compliance.
- Navigating foreign exchange and local payment methods.
For many growing businesses, this is just too much work and complexity to manage. That is why many are switching to a Merchant of Record model, which not only lifts this operational work, but also the stress it brings with it.
What to Look for in a Merchant of Record Partner
Not all Merchant of Record (MoR) providers operate the same way and the partner you choose can have a huge impact on your operations, customer experience and ability to scale. If you’re considering working with an MoR, there are some key things to look out for.
Coverage in Your Target Markets: Make sure your MoR supports the countries and currencies where you operate or plan to grow into. Global expansion only works well if your partner is already equipped to handle local regulations, taxes and payment methods.
Reliable Dispute & Chargeback Handling: Disputes and chargebacks are part of doing business online and a strong MoR will handle these issues efficiently and professionally, representing your side where needed and shielding you from risk. Look for clear protocols and a track record of resolution success.
Compliance & Tax Infrastructure: Tax compliance, data privacy (like GDPR), and PCI DSS standards are essential when doing business online. Your MoR should be staying ahead of these requirements in the form of robust internal systems, automated tax calculation and remittance, and ongoing legal monitoring.
Transparent and Predictable Fees: Get clear on your MoR’s pricing before working with them. Ensure you know what you’re paying for and how fees are calculated across different markets or transaction types. (You can find Trustap’s pricing here).
Smooth Onboarding and Ongoing Support: Your MoR should offer an easy onboarding experience with guided integration and technical support available. You want a team that understands your business model and is responsive when questions arise, both during setup and as you scale.
Why Trustap Stands Out
At Trustap, these aren’t extras, but are part of our core model. From day one, we’ve built our MoR services to be:
- Global by design
- User-focused
- Fully compliant, secure and scalable
- Clear in pricing
- Dedicated to your success, every step of the way
The Trustap Advantage as Your MoR
When you use Trustap, you are getting a partner that manages all parts of the transaction process (including this Merchant of Record service) rather than just a payment processor. As your MoR, we will:
- Protect your brand: We insulate you from reputational and financial risks
- Speed up market entry: You can go live in new regions without waiting on local licensing or payment setup
- Simplify operations: We reduce overhead and complexity, which is especially critical for lean marketplace teams and fast-growing stores.
Why MoR Is a Strategic Advantage
Merchant of Record isn’t just a legal term, but is a strategic decision that can really influence your business capabilities and stress levels. By partnering with Trustap as your MoR, you unlock frictionless commerce, reduce operational burden and give your business the foundations it needs to scale globally.
Interested in speaking with us? Get in touch here.
