Q: What is Merchant of Record?
A merchant of record is an entity that is authorized and held financially liable by an acquiring bank to process transactions. It’s important to note that a merchant of record doesn’t just accept payments on your behalf ̶ this entity is also responsible for reconciliation, managing refund requests and chargebacks, and currency conversion. Additionally, it’s the merchant of record’s responsibility to ensure compliance with PCI DSS standards, data privacy regulations, and other country-specific laws and regulations.
Brands can choose to act as their own merchant of record, but this requires more effort and risk liability. And if you’re selling globally, or anywhere outside of your home market, the complexity and risk grows exponentially. Even the most successful brands who are flush with resources choose to partner with experts to outsource these responsibilities. When an eCommerce partner assumes responsibility to accept payments on your behalf, your brand doesn’t have to worry about financial liability or maintaining banking relationships, merchant accounts, and payment gateways.