What are Merchant of Records (MOR)

What is a Merchant of Records?

Upcoming Businesses often struggle to generate growth. However, once these Businesses are able to consequently and steadily grow, scaling is the next big hurdle. Scaling effectively requires very different strategy than growth generation. Businesses that can scale accordingly often show activities that are indicative of correct Resource allocation and optimization. There are plenty of ways that contribute to Resource optimization such as optimized inventory planning, well-designed CRM (Customer Resource Management) software, correct Marketing Strategies etc. Businesses use a variety of these ways to their advantage, aiming to scale together with their respective growth.

One-way that contributes to the scaling of businesses is a phenomenon called ‘Merchant of Records’. Now, what are Merchant of Records exactly?

As mentioned before, excessive growth often comes naturally with extra work. More orders need to flow out the magazine, backend/frontend customer service increases, different management decisions etc. Payments and the handling thereof increase as well. Depending on the business type, this might result in complex increase in resources needed to facilitate the extra work required. More payments, chargebacks and refunds need to be processed. Tax documentation complexity increases. Pricing negotiation becomes more difficult. Even Transfer pricing agreements might change. All this work requires extra Resources, or better Resource allocation.

One-way companies optimize their Resource allocation regarding Payment services is by utilizing a Merchant of Records. A merchant of record (MoR) can be defined as an entity that handles the selling of goods or services to a customer. Companies can be their own merchant of record, but you can also outsource this work to entities that sell goods or services on behalf of a business and, by doing so, take on the liability related to the transaction (Collier, 2021).

A merchant of records essentially provides freedom by lifting the burden of tax and payment compliance (issues). This helps a business to focus its resource on activities that are prioritized to increase growth and generate further scaling such as product improvements and R&D (Research and Development).

As mentioned before, a company can choose to be its own Merchant of Records or choose to outsource. Outsourcing gives strong benefits when scaling is difficult. Outsourcing a professional and experienced Merchant of Records essentially relieves the burden of performance on all Incoming/Outgoing Payment activities. Well-Established Merchants of Records of course provide complete Transparency at all times. See the picture below for a simplified visual of the Merchant of Record process.

Figure 1. Merchant of Records visual) https://blog.payproglobal.com/what-is-a-merchant-of-record

As scaling is often difficult for many companies, lifting the burden of Financial operational responsibility through Outsourcing a Merchant of Records enables increase in focus and commitment that in turn, strengthens scaling and growth. According to Fortunly (2022), 71% of financial service executives outsource or offshore some of their services and 78% of businesses all over the world feel positive about their outsourcing partners. These statistics further reinforce the positive benefits by outsourcing and outsourcing financial services across the world. Further statistical research suggests that the outsourcing market for financial services will only continue to expand as time goes on.

Tapping into new Markets

‘Identify à adapt à evaluate’ is a known cycle that implies the work ethic required for continuous improvement. Making use of the benefits of outsourcing a Merchant of Records enables more internal resources to be allocated to continuous improvement to stimulate further growth. Companies often use the gained resource efficiency generated by outsourcing to tap into new Markets and expand their customer base.

According to Wunker e.a. (2011), one of the greatest contributing factors of success to any business is a company’s ability to capture new markets. This can be related to new products, customers, industries etc. Tapping into new markets is a great way to generate additional sources of profit and gain competitive advantage.

Merchants of Records can often help with this as they are able to analyze the financial data once a Market entry has been made. For instance, Let’s say you outsource a Merchant of Records. Doing so has resulted in you being able to focus on allocating resource to expand your current customer base by tapping into a new Market. Research suggests that Germany might react positively towards your latest product, given a few improvements. As a result, you make the needed product adjustments and release a variant for the German market. The Merchant of Records now continuously provides you with highly detailed performance data that allows you to track, analyze and evaluate your operations within the German market (from a financial standpoint). The Merchant of Records enables you to keep your focus and facilitate your growth.

As mentioned before, many successful businesses Outsource at least part of their financial operational activities to optimize their practices. Would you like to know more about how your Business can implement a professional Merchant of Records? Talk to a ModusLink Expert today by clicking here.


Fastspring. “What Is a Merchant of Record (And Why Should You Care?)”. FastSpring, 23 december 2021, fastspring.com/blog/what-is-a-merchant-of-record-and-why-you-should-care.

Fortunly. “15 Must-Know Outsourcing Statistics for 2022”. Fortunly, 9 februari 2022, fortunly.com/statistics/outsourcing-statistics/#gref.

—. “15 Must-Know Outsourcing Statistics for 2022”. Fortunly, 9 februari 2022, fortunly.com/statistics/outsourcing-statistics/#gref.

Mansfield, Dani. “What is a merchant of record en why use an MoR as a solution for payments?” Paddle, paddle.com/blog/what-is-merchant-of-record. Geraadpleegd 9 februari 2022.

Meir Amzallag. “What Is A Merchant Of Record: How Does MoR Cut eCommerce Risk?” PayPro Global, 23 november 2021, https://blog.payproglobal.com/what-is-a-merchant-of-record.

Suess, Emily. “4 Tips for Growing Your Business by Tapping Into New Markets”. Small Business Bonfire, 2 januari 2013, www.smallbusinessbonfire.com/new-markets.

Wunker, Stephen, e.a. “Achieving Growth by Setting New Strategies for New Markets”. Ivey Business Journal, 13 februari 2015, iveybusinessjournal.com/publication/achieving-growth-by-setting-new-strategies-for-new-markets.

—. “Achieving Growth by Setting New Strategies for New Markets”. Ivey Business Journal, 13 februari 2015, iveybusinessjournal.com/publication/achieving-growth-by-setting-new-strategies-for-new-markets.