Benefits of Using a Merchant of Record (MoR) for Your Business

Running a business can be tough enough without having to worry about international payments, taxes, compliance. That’s where the Merchant of Record (MoR) model comes in. It’s a game-changer for businesses looking to offload the operational headaches that drain time and resources.

In this article, we’ll break down exactly how the MoR model works, and why it’s becoming the go-to solution for companies who want to focus on what really matters: creating great products and growing their business.

What Is a Merchant of Record (MoR) in Business?

Merchant of Record (MoR) is a legal entity that sells goods or services to an end customer on behalf of the merchant. MoR would process payments and take on associated liabilities like compliance, taxes, and more.

Businesses can choose to be their own MoR, or hire a third-party Merchant of Record provider, like Noda, to do that. Using a third-party MoR offers numerous benefits, for example, merchants can fully focus on their product and business development.

How Merchant of Record Model Works

When you’re using Merchant of Record services, your customers still buy your products via your website. Yet in reality, there are two transactions taking place: between the customer and MoR, and between MoR and your business.

The key differences between selling directly and using an MoR is that their record’s name appears on the customer bank transaction. This means that if a customer starts a dispute, they will be dealing with the MoR rather than your business. MoR is the liable party.

How MoR Solves Key Pain Points

MoR saves time and focuses on growing your business, taking care of the heavy lifting. Here are some of the benefits of using this model:

• No need for global merchant accounts: Forget about setting up multiple bank accounts across countries or dealing with different currencies. MoR handles it all for you.
• Stay compliant effortlessly: MoR ensures you’re fully compliant with PCI-DSS and any local regulations.
• No local business entities required: Avoid the costly process of setting up local entities for tax registration.
• Boost payment conversions: MoR uses multiple processors, smart routing, and cascading to reduce declined payments and improve conversion rates. Plus, they manage payment fees for you.
• No chargebacks: MoR takes full responsibility for chargebacks, disputes, and refunds, saving you time and money.
• Smooth tax: MoR calculates, files, and remits sales tax, tailored to each market you operate in.

Seller of Record vs Merchant of Record

The two terms - Seller of Record and Merchant of Record – are often used interchangeably. Yet they are far from the same. It’s crucial to understand the difference.

A Seller of Record is the online payment system identified as the seller of a product to end customer. MoR, on the other hand, does not assume the identity of the seller. They are the third party that handles transactions.

Partnering with a Seller of Record means you are giving them legal right to sell your goods using your company name and identifying as the original seller.

Who Benefits from MoR Model

The MoR model can be particularly valuable for businesses that sell globally, beyond where the company is set up, as it comes with a lot of financial and legal admin. MoR would free the businesses from having to worry about any of that. Below are some examples of Merchant of Record in practise.

• Software as a service (SaaS) companies can benefit from MoR as their customer base is global by default. This can make payments, billing and taxes more complicated.
• E-commerce and direct-to-consumer retailers also sell internationally, without having local offices or bank accounts. This includes digital products such as eBooks, online games, and mobile apps on AppStore and GooglePlay.

Cost of Doing it Yourself

Managing global payments and taxes on your own might seem like a way to stay in control, but it can lead to unexpected costs and headaches. You’ll need to hire developers, set up payment systems, and keep up with constantly changing rules in different countries. All of this takes time, money, and attention away from your core product.

That’s where an MoR model  comes in. MoR will take care of payments, taxes, and staying compliant, so you don’t have to. This means less stress for your team and more time to focus on what matters—building your business.

Why Choose Noda as Your Merchant of Record

Let us handle the complexities while you focus on growing your business. At Noda, we provide Merchant of Record services, taking care of payments, taxes, and support, so you don’t have to.

Expand into global markets with ease. We simplify international sales, turning complicated processes into smooth transactions. No more tax headaches. Our smart system handles everything—from calculating sales tax, VAT, and GST to filing with tax authorities on time. We stay updated on the latest tax laws, ensuring you stay compliant without lifting a finger.

Here’s what we manage for you:

• Payment processing
• Tax management
• Compliance oversight
• Fraud prevention
• Currency conversion
• Merchant support

Support that’s always there for you. Whether it's a payment issue or a quick question, our 24/7 support team is ready to help. No matter the time zone, we’ve got you covered with:

• Multi-language support, anytime
• Insights to help you make smarter business decisions
• Top-tier security to safeguard your revenue
• Regular tech updates for smooth operations

From solo entrepreneurs to large teams, we’re here to make your journey to global success easier. Let Noda streamline the complexity so you can keep growing.