Key Differences Between a Merchant of Record, Seller of Record, and Payment Service Provider

  • What each term means
  • How Merchant of Record is different from Seller of Record
  • How it’s different from a Payment Service Provider
  • A side-by-side comparison between the three
  • How to choose the right partner for your online business, and
  • Implications of each model on payment authorization and conversion rate

What is a Merchant of Record?

How does a Merchant of Record work?

Merchants of Records is helpful if you want:

  1. Global Financial Compliance: If you sell to a global audience, MoR will help you collect and remit taxes to comply with consumer protection regulations.
  2. Borderless SaaS Payment: An MoR can collect subscriptions and process payments frictionlessly.
  3. Pro Merchant accounting: An MoR is cheaper, safer, and more efficient than traditional merchant accounting, setting up local offices and other infrastructures necessary for processing cross-regional payments.

What is a Seller of Record?

How does a Seller of Record work?

Seller of Record is helpful if you want:

  1. Outsource liabilities: you can focus on customer acquisition and product upgrades and outsource the seller’s liability and legalities to an SoR.
  2. Reputation Control: an SoR identifies the original seller to control the production brand through a seller contract.
  3. Manage Recourse: In an unsuccessful purchase, a Seller of Record is responsible for customers’ legal rights that demand compensation or refund.

What is a Payment Service Provider?

How does a Payment Service Provider work?

Payment Service Provider is helpful if you want:

  1. Manage your transactions: accept various online payment methods, like online banking, credit cards, debit cards, e-wallets, cash cards, and more.
  2. Reduce processing cost: financial institutions cut processing costs for PSPs because they manage in bulk. This will cost way more if you try to partner directly.

Merchant of Record vs. Seller of Record

Merchant of Record vs. Payment Service Provider

Merchant of Record vs. Payment Gateway

Difference Between a Merchant Of Record, A Seller Of Record, And A Payment Service Provider

Which Kind of Partner is Right for Your Online Business?

Here are some key factors you should consider while choosing a partner:

1. Security

2. Support

3. Easy Integration

Implications on Payments — Authorization and Conversion Rates

What are Authorization Rates?

What are Conversion Rates?

What are the Implications of Higher Auth Rates and Conversion Rates to Merchants?

Bottom Line

2Checkout (now Verifone) is the leading all-in-one monetization platform for global businesses built to help clients drive sales growth across channels.

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2Checkout (now Verifone)

2Checkout (now Verifone)

2Checkout (now Verifone) is the leading all-in-one monetization platform for global businesses built to help clients drive sales growth across channels.

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