Merchant of Records: who they are and what they do

For a brand that owns an online store or operates on a marketplace, relying on professional and specialized entities is essential to ensure safe and seamless transactions for their clients. One of the most important figures in this context is undoubtedly the Merchant of Records (also abbreviated as MoR), a fundamental entity in the realm of digital transactions and regulatory compliance. Merchant of Records plays a key role in managing online payments, handling customer data, and fulfilling tax and legal responsibilities related to digital commerce. Let's take a closer look at who they are.

In the context of online commerce, Merchant of Records are entities or organizations that act as intermediaries between sellers and payment processors. They serve as custodians of financial information related to transactions, ensuring compliance with financial regulations and the security of operations. In practice, a MoR is responsible for collecting funds from customers through secure online payment platforms, processing payments, and forwarding funds to sellers, all while adhering to the laws and financial regulations that govern online commerce.

MoRs not only manage payments, but are also the entity issueing a receipt or invoice to the end customer. This dynamic favors the brand with which the intermediary establishes a B2B connection, relieving it from the daily issuing of hundreds of payment documents. Furthermore, they guarantee compliance with tax regulations and international payments which, as is well known, are constantly changing. In Italy, it deals with taxation linked to sales including VAT, guaranteeing its payment through its tax representatives or the OSS system.

The significance of Merchant of Records extends to both sellers and consumers. For sellers, outsourcing to a MoR simplifies the payment management process, avoiding the complexities of financial intricacies. They also play a crucial role when a brand seeks to internationalize, acting as intermediaries capable of managing financial transactions, taxes, regulations, and other matters related to international sales. For consumers, the presence of Merchant of Records enhances trust in the online payment process, as these intermediaries act as guarantors of transaction integrity.