Understanding your options and obligations as a seller of online goods and services requires navigating the complexities of global expansion. On the one hand, more payment options, chargebacks, and refunds need to be managed, while tax documentation complexity increases every year. On the other hand, pricing negotiation becomes more difficult with each new partner.
All these requirements for global expansion, and the associated complexities, slow many companies down in their projects. Without a clear vision of the long-term benefits that new markets will bring, it can seem too long and costly to take the plunge. This is where a Merchant of Record (MoR) can play a crucial role in addressing these challenges and facilitating international growth for businesses.
A Merchant of Record is an entity that operates a web store and a checkout process as a vendor’s official reseller, managing the commercial interactions with the end customers, providing due diligence, and overseeing all commercial activities, including:
Maintaining financial liability for the goods bought to the vendor and sold to the end user
Overseeing payment compliance while mitigating risk
Managing transactions, refunds, cancellations, and disputes
Handling chargebacks and fraud resolution
Responsible sales and import taxes as a seller and merchant
Adhering to customer data compliance
Forbidding the sales of illegal, prohibited, or counterfeit products or services
Maintaining a direct relationship with payment service providers
Providing billing-related customer support.
To put these into context at a higher level, let’s consider the following example:
Your business offers software products. After shoppers have filled their shopping cart on the MoR official reseller online store, it is now time to start the checkout process. This is where local or region-based taxes will be displayed in addition to the base price of the purchase. The MoR calculates, applies, collects, and remits these taxes to the rightful tax authorities seamlessly, as part of your company's overall user experience. There is a smooth connection between your brand experience and the MoR process for handling the transaction.
As the vendor’s official reseller, the MoR is responsible for contracting the sales with the end users and is entitled as a merchant on the transactions.
Even though the example above paints a simple picture of how a MoR operates as an official reseller, it also highlights the important role the Merchant of Record plays in maintaining full financial liability over the products and services sold. This translates into the following day-to-day duties:
Buying and then reselling the vendor’s digital goods to the end users
Maintaining a Nexway merchant account and a checkout process on the webstore for accepting payments
Negotiating, managing, and submitting credit card processing fees
Ensuring strict compliance with PCI-DSS standards for protecting cardholder information and adhering to all local, regional, and global data security regulations
Managing full tax liability, including tax calculation, collection, and remittance (varies by country and region)
Building strong relationships with merchant banks and payment processors, including managing contracts with global service providers
Staying compliant with country-specific payment laws and regulations
Remaining up-to-date and compliant
Handling refund requests, chargebacks, and fraud resolution.
Nexway is a reputed ecommerce partner for online businesses that has been serving as a Merchant of Record for over 20 years. We handle everything related to checkout, including user experience, payment processing, and tax management, thus enabling clients to focus on product development and marketing efforts. Learn more about Nexway’s Merchant of Record capabilities.
Pierre-Henri is the VP Global Accounts of Nexway, a technology and services company for online commerce. As an expert in the global payment market, Pierre-Henri built extensive knowledge during more than ten years in the industry by supporting digital companies to expand into new markets, foster growth, and seek new opportunities.
With over two decades of experience, Nexway handles the complexity of online sales and covers the full scope of eCommerce aspects to help businesses optimize their online sales and revenue streams. From worldwide accepting payment to subscription handling and tax management, leverage time and money while scaling your business into the global market. The company's clients include Kaspersky, ESET, Bitdefender, Opera, and many more companies across the globe.
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