What is a Merchant of Record?

A Merchant of Record is a critical player in the e-commerce ecosystem that manages and assumes the risks and responsibilities associated with each transaction. Simply put, they are the entity formally acknowledged by payment networks like Visa or Mastercard, and they take responsibility for the funds in a transaction from the time a customer makes a payment until it is deposited into the merchant's account.

The MoR is responsible for processing customer payments, managing tax compliance, ensuring data security, and handling chargebacks or refunds. It deals directly with payment processors, banks, and other financial institutions on behalf of the merchant. In this capacity, the MoR helps e-commerce businesses to concentrate on their primary areas of expertise, such as product development and marketing, while leaving the complex world of online transaction processing to the experts.

Why Use a Merchant of Record?

The following are some of the key reasons why you may choose to use a Merchant of Record for your e-commerce business:

1. Simplified Payment Processing

An MoR provides an all-in-one solution for accepting and processing online payments. They offer an integrated platform that can handle different payment methods (credit/debit cards, digital wallets, etc.), currencies, and languages, making it easier for businesses to expand globally.

For example, here are the options Transaction Cloud offers:

  • Card payment methods such as Visa, Mastercard, Amex, Discover, JCB, China Union Pay, Hipercard, Tarjeta, Nativa, Argencard, Elo, Cencosud, Cabal, Naranja and many more,
  • Wallet payment methods: PayPal, Apple Pay, and Google Pay.
  • Checkout automatically displayed in the local language based on customers’ device settings.
  • 13 local languages for customers to choose from.
  • 21 supported currencies including all major and several minor currencies.
  • Local taxes based on customers' location.

2. Risk Management

The MoR assumes responsibility for payment compliance and the risk of chargebacks and fraud. This is a significant advantage, as dealing with fraudulent transactions can be a complicated and costly process.

Here’s how Transaction Cloud keeps your transactions secure:

  • Organization Verified (OV) Certificate.
  • SHA2 & ECC Encryption.
  • $1,000,000 SSL Certificate Warranty.
  • PCI DSS compliant front-end and back-end infrastructure.
  • Periodic vulnerability scans to maintain robustness.

3. Tax Compliance

One of the challenging aspects of running an international e-commerce business is understanding and adhering to the different tax regulations in various jurisdictions. An MoR can calculate, collect, and remit taxes on your behalf, eliminating the headache of trying to stay compliant with multiple tax laws.

Here are some examples from Transaction Cloud:

  • Our compliance team stays up to date with changing global sales tax laws and rates, so you don’t have to.
  • Our platform properly lists sales taxes on invoices whether it is sales tax or VAT, GST, HST, QST, PST.
  • Automatic VAT # validation of EU business.

4. Seamless Customer Experience

A good MoR will offer a seamless checkout experience, reducing friction in the payment process and helping to improve conversion rates. This includes offering local payment options and managing transaction errors effectively.

In addition to already mentioned benefits for better customer experience, Transaction Cloud lets you customize your own checkout, offering:

  • Fully customizable payment button on your website.
  • Custom branding for each product on checkout screen.
  • Custom navigation after payment for each product.
  • Sleek, modern, and intuitive payment interface.

5. Scalability

As your business grows, so do the challenges associated with handling a higher volume of transactions. An MoR will be able to scale with your business, managing an increased transaction load without any additional strain on your internal resources.


In today's increasingly digital world, e-commerce businesses need to ensure they are optimizing their operations for both efficiency and customer satisfaction. By delegating the complex responsibilities of transaction processing, tax compliance, and risk management to a Merchant of Record, such as Transaction Cloud, businesses can focus on their core competencies, and potentially see significant improvements in their growth and profitability.

Whether or not to use a Merchant of Record will depend on your specific business needs, resources, and growth plans. However, by understanding what an MoR is and the benefits it can provide, you'll be better equipped to make the right decision for your e-commerce venture.