What a merchant of record does.

Three models

A payment gateway is technology. It carries card details from your checkout to the bank that processes them and returns an answer. The gateway does not sell anything. Behind it there is always a merchant account, and the business named on that account is the merchant.

Your own merchant account is a direct relationship with an acquiring bank, or with a provider that gives you an account in your own name. You are the merchant of record. Your business name is on the buyer's statement, chargebacks are filed against you, and the card networks' rules apply to you through your acquirer [1].

A merchant of record stands between you and the buyer. The buyer's contract of sale is with the MoR, the payment is taken under the MoR's account, and the MoR's name appears on the statement, usually followed by yours. For the card networks and the bank, the MoR is the merchant. For your customers, the store is still yours.

Side by side

What the MoR is responsible for

Because the MoR is the seller in law, it carries the obligations that come with taking money from a buyer. In practice that means:

• Running the checkout and taking payment, including card authentication such as 3-D Secure where the issuer asks for it.
• Issuing receipts that tell the buyer who charged them and how to get help.
• Refunds. The MoR sets the minimum refund standard buyers can rely on and can refund directly when a store is slow.
• Disputes. When a cardholder disputes a charge with their bank, the dispute comes to the merchant of record, which must answer within the network's deadlines [2]. The MoR asks the store for evidence and builds the response.
• Records. Every order, fee, refund, dispute and reserve movement, kept so they can be produced for the buyer's bank, the networks or a regulator.
• Screening and monitoring. An MoR answers for every store it sells for, so it verifies the business and its owners and keeps watching what the store sells and how.
• Settlement. Proceeds, net of fees and any reserve, paid to the store's own bank account on an agreed schedule.

The buyer also benefits from having one responsible party. If a charge looks unfamiliar, the name on the statement leads to a company that can explain it, which is why a clear buyer help page is part of the job. US cardholders can also take a billing error to their card issuer under federal rules, and the issuer then turns to the merchant of record for an answer [3].

What stays with you

An MoR does not make or ship anything. The supplier remains responsible for what is in the box and for what the storefront says about it:

• sourcing, testing and labeling the products, with documentation such as certificates of analysis;
• keeping the storefront within the MoR's rules, which for research suppliers means research-use presentation and no claims;
• shipping orders and uploading tracking, since delivery evidence decides many disputes;
• answering customers about their orders.

The arrangement works when both sides do their part. The MoR's monitoring is there to keep the storefront and the payment telling the same story.

When an MoR fits

An MoR is a good fit when one or more of these is true:

• Your category is closely watched. Research-use suppliers are a good example: the products are legal, the market is real, and acquirers are cautious. An MoR that specializes in the category can underwrite it properly and keep it in good standing.
• You want disputes and refunds handled by people who do it every day, with a record that already contains what a bank asks for.
• You would rather spend your time on product and service than on receipts, reconciliation and network rules.

It may not be the right fit if you already hold a stable merchant account in your own name, have the team to run disputes, and want your business alone on the statement. The cost of an MoR reflects the work and risk it takes on, and the rate depends on volume, product mix and history.

If you want to see how this works in our case, the merchant of record page walks through the money flow, and payouts and reporting covers settlement and reserves.