What is a Merchant of Record?
A Merchant of Record (MoR) is a legal entity that sells goods or services to an end customer. The MoR is the recipient of the payment from the customer; it processes payments and is responsible for all transactions, including sales taxes, compliance with security standards in accepting payments, as well as processing cancellations and returns. Enterprises can become merchants of record and deal with all these issues on their own. There are also MoR service providers. They take care of all the processing of payments and returns and allow businesses to focus on creating and promoting their products and services instead of wasting resources on financial matters.
If your company uses MoR services, customers still visit your site to purchase. However, since the MoR effectively becomes a reseller and records payments, two transactions are made: one between the end customer and the MoR, and then the merchant of record transfers the funds to you.
The peculiarity lies in the fact that at the end of the transaction, the name of the merchant of record is on the check, not yours. In case of any disputes, the buyer resolves them with the merchant of record.