Merchant of Record (MoR)

The Merchant of Record (MoR) refers to the entity officially recognized as the seller in a transaction. This designation is crucial because it determines which party is responsible for the collection and remittance of sales taxes to the appropriate taxing authorities, as well as for the adherence to various compliance regulations related to payments and customer transactions. In essence, the MoR holds the legal obligation to ensure all aspects of a sale are handled correctly.

In many online business models, especially those involving platforms that host multiple third-party sellers (such as marketplaces or SaaS platforms), the platform itself can act as the MoR. By doing so, the platform manages the complexities of payment processing, tax collection, and compliance on behalf of its sub-merchants or suppliers. This arrangement simplifies the responsibilities for individual sellers but places a significant operational and regulatory burden on the platform acting as the MoR.

Responsibilities of a Merchant of Record include:

By consolidating these responsibilities, the Merchant of Record can provide a seamless experience for both the sub-merchants on its platform and the end consumers, facilitating smoother transactions and potentially enhancing customer satisfaction. This role is particularly advantageous for smaller merchants or those who prefer not to handle the direct complexities of financial and legal compliance associated with online sales.