Merchant of Record
One of the ways we make it easier to sell globally is by operating as your Merchant of Record (MOR). A MOR is a legal entity authorized by a financial institution to process each customer’s credit card, debit card, or any alternative payment transaction.
As your MOR, we also have the capability to handle local taxes (VAT, GST, service tax, etc.) in over 50 countries—including collecting taxes, accounting for them, and paying them to the local authorities.
Your customers continue to relate to your company as their source of products and services. We work behind the scenes to facilitate your payment processing, compliance, and end-to-end taxes. Using ModusLink as your MOR means you take advantage of cross-border growth opportunities while leaving local law and regulation compliance, payment administration, and processing to us.
Our tax-related responsibilities as your MOR:
- Monitoring the sales tax thresholds in the jurisdictions where sales tax is introduced; applying for sales tax registration once the threshold is reached; applying for sales tax registration in jurisdictions where there is no threshold
- Appointing tax agents and representatives in jurisdictions that require one (an external cost that can exceed thousands of dollars a year)
- Accounting for sales tax on either B2C sales or both B2B and B2C transactions
- Reporting and remitting the sales tax to the local tax authorities (a monthly or quarterly process among over 50 different countries involving cross-border funds transfers in multiple currencies)
- Monitoring sales tax rate changes in jurisdictions where sales tax is in place and where changes have been proposed
- Ensuring supporting documentation issued to B2C and B2B customers compliant with local sales tax laws
- Having systems in place to support sales process automation
- Dealing with other relevant reporting and compliance requirements, such as European Commission (EC) sales list detailing B2B and B2C transactions
How we safeguard fraud and ensure compliance:
- ModusLink uses two layers to protect against fraud: our payment providers and software with proprietary algorithms
- We process customer transactions using several payment providers in the background with excellent built-in anti-fraud solutions
- Anti-fraud software ensures payments are secure and to prevent fraudulent checkout activity
- We use Payment Card Industry (PCI) compliant providers to process credit and debit card transactions, providing an additional layer of security with our third-party tokenization service
- We adhere to the PCI data security standard
Offload the complexities. Gain the expertise.
Collecting, managing, and paying taxes is growing more complex every year. There are now over 50 countries where you need to deal with local taxes. And the more eCommerce customers you acquire, the more financial liability and payment issues emerge.
A normal payment service provider, such as PayPal, processes payments but doesn’t handle local compliance and taxes. ModusLink does it all to protect you from potential fines, penalties, or other legal issues. Our team of experts knows the culture, laws, and regulations of any country where your company is doing online business.
We’ll take care of all the details unique to global, online markets, from buying options, consumer protection disclosures, and available payment options, to sorting out exportation restrictions and applicable regulatory fees. Leave the merchant of record complexities to ModusLink.
Did you know?
Taxes are now charged according to where your customer is based, rather than where your company is located. This means the tax rate and the type of transaction where it applies vary by customer and country.