What is a Merchant of Record?

mer - chant of re - cord

noun

The Merchant of Record (MoR) is an entity that is authorized and held liable by the financial institution to process the end consumer’s credit and debit card transactions.

How Does a Merchant of Record Work?

A Merchant of Record is like a reseller. They receive payments from the shopper/ buyer to their account and then pay back the merchant for the products.

This whole process happens in seconds.
If a customer purchases a product from a merchant, and that merchant uses an MoR, two transactions occur: one between the MoR and the buyer and the other between the merchant and the Merchant of Record.

When customers input their payment details at website checkout, the payment is processed in the name of the MoR because they own the merchant account in the backend. What it means is that the MoR is the entity whose name appears on the customer’s credit or debit card statement when they make a purchase.

The Merchant of Record is the organization responsible for all the liabilities associated with the payment transactions, ensuring PCI (payment card industry compliance) and tax laws, checking for fraud, and accepting refunds and chargebacks.