“Merchant of Record” (MoR) is a term that’s common in SaaS and digital goods but genuinely confusing to most merchants. The distinction matters because it determines who holds legal and financial liability for customer transactions and that has real implications for tax compliance, chargebacks, and customer relationships.
What Is a Merchant of Record?
The Merchant of Record is the entity that is legally responsible for a transaction with the customer. The MoR:
- Appears on the customer’s credit card statement
- Is legally responsible for the sale, including refunds, chargebacks, and consumer protection obligations
- Is responsible for sales tax collection and remittance in applicable jurisdictions
- Bears liability if the transaction is disputed or the product isn’t delivered
In a standard ecommerce transaction, you are the Merchant of Record. Your business name appears on the statement. You’re responsible for the customer relationship.
When a Third-Party MoR Is Used
Some businesses use a third-party Merchant of Record service, a company that acts as the legal seller on your behalf. Common use cases:
- Global SaaS and digital goods: Companies like Paddle and FastSpring act as MoR for software companies selling globally, handling VAT, sales tax, and currency conversion across hundreds of jurisdictions
- App marketplaces: Apple App Store and Google Play are the MoR for apps sold through their platforms
- High-risk digital products: Businesses that have difficulty getting direct merchant accounts sometimes use MoR services
MoR vs. Payment Facilitator: The Key Difference
| Dimension | Merchant of Record | Payment Facilitator (PayFac) |
|---|---|---|
| Who appears on customer’s statement | The MoR provider | You (the merchant) |
| Who owns the customer relationship | The MoR provider | You |
| Tax liability | The MoR provider | You |
| Chargeback liability | The MoR provider | You |
| Pricing control | Limited | Full |
| Brand recognition at checkout | Provider’s name | Your name |
ConvesioPay’s Model: You Remain the Merchant
ConvesioPay operates as a Payment Facilitator, not a Merchant of Record. This means you retain full ownership of your customer relationships, your brand appears at checkout, and you remain the legal entity responsible for transactions. ConvesioPay provides the payment infrastructure, acquiring, fraud detection, settlement, while you maintain control of the merchant identity.
This is the right model for WooCommerce merchants who want professional payment infrastructure without ceding brand ownership or customer relationship control to a third party. You keep the customer. ConvesioPay handles the complexity. Flat rate: 2.9% + $0.30 per transaction, no monthly fees.
When to Consider a True MoR Service
A third-party MoR service makes sense when: you sell pure digital goods globally and don’t want to manage tax compliance in 100+ jurisdictions; you’re a software company whose primary market is B2B SaaS sold internationally; or you’re early-stage and the simplicity of outsourcing all merchant liability outweighs the cost of reduced brand control. For most WooCommerce merchants selling physical or mixed goods, the PayFac model is the better fit.
Ready to get started? Learn more about ConvesioPay or view pricing.