What Brands Should Know About a Merchant of Record before Expanding Global Commerce

businessman holding a globe

Ecommerce brands have countless revenue-generating operations to manage, from product selection to promotions and sales. Other operations, such as payment and transaction processing, are essential but can take time away from value-added activities. Many global ecommerce businesses turn to a Merchant of Record (MOR) to take on the heavy lifting associated with global commerce. This includes online payment processing, taxes and legal compliance. 

What is a Merchant of Record?

An MOR is a third-party legal entity that takes on the responsibility of processing customer payments for goods and services sold by an ecommerce company to the end consumer. The MOR will receive the initial payment from the consumer and their name will appear on the consumer’s bank statement. After receiving the payment, the MOR handles fees and taxes and then pays the merchant. 

Some areas of responsibility include:

  • securing legal and regulatory compliance 
  • ensuring the legitimacy and legality of the transactions
  • detecting and preventing fraudulent transactions
  • handling chargeback processes
  • managing the billing process

Ecommerce companies often utilise MOR services to sell internationally while receiving support with the complexities involved.

How Does a Merchant of Record Work?

First, the ecommerce company will select an MOR and enter a partnership agreement with them. Next, the MOR will integrate with a payment gateway. They will do so either on their own or through a third-party, enabling the processing of payments.

Once the ecommerce business has integrated with the payment gateway, transaction processing can begin. When a customer makes a purchase, the gateway receives and processes the transaction details. The MOR will verify the payment, check for fraud and ensure the payment complies with any applicable laws and regulations. 

This may include remitting sales taxes or Value Added Tax (VAT). For international purchases, the MOR will manage currency conversions. After these steps, the MOR will remit funds from the processed transactions to the ecommerce business. They will also deliver reports to the business about payment transactions, chargebacks, fees, etc. 

In the case of a customer dispute, the MOR will manage the chargeback process to manage the dispute. Similarly, some MORs will offer customer support services. 

What are the Benefits of Using a Merchant of Record?

There are several benefits of using a MOR for ecommerce businesses, especially those expanding their global footprint, including:

More time for growing the business

With a reduced administrative burden, brands can focus on their core business-related activities and generating revenue. All while the MOR manages the complexities of payment and transactional processing. 

Fraud prevention

Global ecommerce losses to fraud are projected to reach $48 billion by this year. Therefore fraud prevention is essential for any business selling goods and services online. The advanced fraud prevention systems MOR provides can help protect online businesses’ revenues and profitability. 

Regulatory compliance

Managing compliance with local laws and regulations can be quite complex for businesses that operate in multiple locations. MORs take responsibility for compliance with payment regulations, sales tax collection, VAT, etc. 

Supported global expansion

MORs have out-of-the-box infrastructure to support ecommerce brands as they expand globally. For businesses that work in multiple currencies, MORs will handle currency conversion. 

They will also make sure they receive payments in the desired currency at the best available rate. They can also help to reduce headaches associated with customs and duties. 

Financial reporting

MORs provide transaction reporting so businesses can better monitor sales, revenues, chargebacks, disputes, etc. 

Chargeback management

Managing chargebacks takes time away from revenue-generating activities. MORs can take on this process to manage and resolve these disputes. 

Varied payment methods

MORs typically support a range of payment methods to offer customers greater flexibility. 

Customer support

MORs that offer customer support assist customers with questions about transactions. In this way, the MOR is serving as an extension of the ecommerce brand’s team.


Ecommerce brands can save on the costs associated with setting up payment processing systems, setting up local entities and hiring experts in these areas by working with an MOR. 

Localised customer experience

For a better customer experience, MORs offer a localised checkout experience. Localisation includes prices in local currencies, local payment methods and tax-inclusive pricing. 

What to Consider When Selecting an Merchant of Record

A businessman and businesswoman shake hands

To achieve the benefits mentioned above, ecommerce brands must follow careful criteria when selecting an MOR. These criteria will vary depending on the brand’s goals and operations. But there are some common factors every brand should consider:

Geographical coverage

The MOR should be established in many global markets, particularly where the brand operates or intends to operate. They should have a strong presence in these markets and demonstrable expertise with multiple types of business. 

Robust fraud prevention and security

To protect the merchant’s brand and revenue, the MOR should have strong fraud detection and prevention mechanisms. Some features to look for include real-time fraud screening, data encryption and compliance with industry standards such as PCI DSS.

Easy integrations

Make sure the MOR integrates seamlessly with your essential systems, such as your ecommerce platform and customer relationship management (CRM) system. 

Variety of supported payment methods

The MOR should support your customers’ top payment method preferences. Payment methods vary by market but generally include credit cards, debit cards, digital wallets, bank transfers and local methods. 

Customer service

Investigate the MOR’s customer service offerings and their ability to operate in multiple time zones, languages and communication channels. The MOR should be committed to the brand’s ongoing success. 

Chargeback management

Explore how the MOR manages chargebacks. Ideally, they will have a streamlined process for dispute resolution, communication with banks and support in cases of fraudulent chargebacks.

Reporting and analytics

To support informed decision-making, the MOR should have user-friendly dashboards and reports on transactions, payments, fees, customer interactions, etc. 


Make sure the MOR allows for the customisation of the customer experience to maximise conversions. It should also be flexible enough to adapt to other needs, such as a custom checkout experience or special promotions. 


The MOR should grow with your ecommerce operations. It should also offer advanced tech stacks that can handle global expansion and an increase in sales volume. 


Read reviews and case studies of the MOR’s experience with other customers. Look for an MOR with a proven track record of success with businesses similar to yours.

Sustainability practices

Look into how the MOR offsets carbon emissions and their sustainability initiatives. 

Currency and tax management

Investigate to see if the MOR can manage multiple currencies. In addition it should provide real-time conversion rates and efficiently manage tax collection and remittance for various regions.

  • Regulatory compliance. Research the MOR’s experience in managing regulatory compliance, especially in complex markets. They should be adept at handling local laws, taxes and payment regulations.
  • Contractual terms. Make sure you understand the contract’s terms, including fees, payout schedules and termination clauses.
  • Pricing. Similarly, get a full picture of the fee structure, including transaction fees, monthly charges, setup fees and any other potential costs.

Ultimately, the MOR will serve as an extension of your ecommerce brand. It pays to work with a merchant of record that has expertise across multiple channels, markets and currencies. At ESW, we have a proven track record of helping brands expand their global ecommerce presence and drive long-term growth. Contact us today to learn more.