Merchant Of Record: Choosing The Right Partner

Published in

PayPro Global

4 min readDec 15, 2023

Since the world has been steadily shifting towards eCommerce, one might think that the concept of borders is increasingly blurry. But in terms of rules and regulations, it’s quite the opposite.

Because processing payments worldwide is a complex, highly regulated endeavor, numerous SaaS and software companies are now, more than ever, forming strategic alliances with Merchants of Record service providers.

A robust MOR partnership presents a significant advantage on your global growth journey: it allows you to concentrate on perfecting your product while taking care of the entire payment process, offloading the intricate operational responsibilities associated with international expansion.

However, to successfully expand globally, you need to be able to rely on the Merchant of Record with whom you are collaborating. Check out our guide to find out more about what a Merchant of Record can do for your business.

So, the first real challenge is finding the right fit for your SaaS, and we have some pointers as to how you can do this successfully. That being said, let’s dive in!

6 Features to Consider when Choosing an MOR

What are system features, if not solutions to pressing needs? This concept remains valid when considering payment solutions like the Merchant of Record model.

1. Regulatory Compliance

To enable worldwide online payments and win international customers, your SaaS business must establish local business entities and adhere to the regulatory requirements of the markets where you operate. Achieving compliance in these diverse markets can, however, be a complex undertaking, to say the least.

This is where partnering with a Merchant of Record emerges as the ideal solution to all your problems. For a better understanding of how this applies specifically to SaaS CFOs, you might find this article on Merchant of Record for SaaS CFOs particularly insightful.

2. Global Reach

One of the reasons for partnering with a Merchant of Record is to increase the number of international payments.

However, achieving this goal hinges on your partner’s ability to offer a wide range of local payment methods that cater to the diverse customer preferences currently trending across various territories.

3. Rapid Integration

Integrating with a Merchant of Record can be a challenging endeavor due to the complexity of the system.

Many SaaS businesses encounter technical hurdles that result in heightened frustrations and stress levels, not to mention wasted time.

When exploring MOR options, prioritize those solutions that have invested time and resources into streamlining the onboarding process and offer robust support and guidance to vendors during the integration phase.

This proactive approach can significantly mitigate potential technical disasters and ensure you have made the right choice.

4. Customer and Vendor Support

Prompt and precise customer support is a critical aspect of any partnership, and it becomes even more vital when dealing with a complex payments infrastructure like the Merchant of Record.

Everyone should know by now that support can make or break a business.

Your shoppers should not only receive timely and dedicated customer support for payment-related matters, but your team should have confidence in your chosen Merchant of Record’s ability to respond swiftly, thoroughly, and professionally to both customization and technical queries.

Encountering technical challenges is a common part of a SaaS business’s growth journey.

With the proper support from your MOR payments solution, all issues can be efficiently resolved, allowing your business to continue gaining global online transactions.

5. System Flexibility

While sales tax management is a valuable Merchant of Record service, don’t overlook the significance of system flexibility. MORs were designed to support global expansions for businesses of all sizes, each with its own unique needs.

Enterprise-level companies demand strict infrastructure requirements. Without robust customization options, the MOR system might hinder, rather than foster, business growth.

A strong MOR also aids in maintaining flexible pricing, delivering personalized shopping experiences, and creating multiple payment flows.

This system flexibility ultimately ensures the highest customer satisfaction and keeps global sales thriving.

6. Fraud Protection

We’ve said this before, and we will say it again. A Merchant of Record worth its salt takes fraud seriously and acts accordingly.

As a result, to securely process payments, it will provide its partners with a holistic and robust fraud detection and prevention strategy tailored to the unique characteristics of your business.

How Do You Compare Different MOR Solutions?

An MOR partnership becomes strategically valuable only when the selected Merchant of Record is an ideal match for your SaaS business.

Beyond system features, it’s vitally important to thoroughly evaluate other critical factors.

Understand your business needs

The features you seek in the ideal Merchant of Record should answer your business needs.

So, establish those first. If you’re new to this and don’t know what to expect, make sure you join forces with a partner who can give you all of the expertise and time you need.

Consider scalability potential

Don’t just focus on your current business needs; think about your future ones, too.

Your MOR infrastructure should pave the way for your SaaS to flourish, not hold it back.

Examine the MOR’s pricing structure

Gain insight into the pricing structures offered by each MOR, encompassing setup fees, transaction costs, and ongoing expenses.

Evaluate how these fees align with your budget and revenue forecasts.

Here are the 3 Steps to ensuring a successful MOR partnership.