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What is Merchant of Record?
MoR for Online Marketplaces explained

Online marketplaces have revolutionized the way we shop, providing easy access to a wide variety of products and services from the comfort of our own homes. However, the process of payment and transaction management can be complex, especially for online marketplaces with multiple vendors. To make things easier, many marketplaces use a Merchant of Record (MoR) service. In this article, we'll dive deeper into what a MoR is, how it works, and why it's important for online marketplaces.

What is a Merchant of Record (MoR)?

A Merchant of Record is a third-party service provider that processes transactions on behalf of merchants or sellers. Essentially, the MoR takes on the responsibility of processing payments, managing refunds, and complying with relevant regulations, freeing up the marketplace operator and individual sellers from the associated administrative burden.

How does MoR work for online marketplaces?

Online marketplaces that use MoR services typically route all payments through the MoR. The MoR is then responsible for disbursing payments to the individual sellers or vendors, after deducting any applicable fees. This ensures that the marketplace operator is not responsible for the payment processing, which can be a time-consuming and expensive task.

Why is MoR important for online marketplaces?

There are several reasons why MoR is important for online marketplaces. First, it simplifies the payment process by consolidating all transactions into a single system. This can help reduce errors and streamline the payment flow. Second, MoR provides an added layer of security and fraud protection, ensuring that transactions are processed safely and securely. Finally, MoR ensures that all payments are compliant with relevant regulations, which is especially important in heavily regulated industries such as finance and healthcare.

What are the benefits of using MoR for online marketplaces?

The benefits of using MoR for online marketplaces are numerous. Some of the key benefits include:

  • Simplified payment processing
  • Reduced administrative burden
  • Increased security and fraud protection
  • Compliance with relevant regulations
  • Improved customer experience


Need help setting up Merchant of Record for Marketplaces?

The TFE Datahub is a multi-channel E-commerce management tool for Sales, PIM, ERP, Stock management and Price management, ready for the Merchant of Record (MoR) role for your company on Online Marketplaces. It's proven to work for Marketplaces and is ready to connect to multiple warehouses, custom webshops and more E-commerce platforms. TFE can help as a Marketplace Agency.

What are the drawbacks of using MoR for online marketplaces?

While there are many benefits to using MoR for online marketplaces, there are also some potential drawbacks to consider. One of the biggest concerns is the additional fees associated with using a MoR service. Additionally, using a MoR may limit the marketplace’s ability to customize its payment process or implement certain features.

How to choose the right MoR service for your online marketplace?

Choosing the right MoR service for your online marketplace is crucial to ensuring a smooth and successful payment process. When selecting a MoR service, consider factors such as fees, security features, compliance with regulations, and support for different payment methods. It’s also important to choose a MoR with a proven track record of success and positive customer reviews.

What are some examples of MoR services for online marketplaces?

There are several MoR services available for online marketplaces, each with its own unique features and pricing structure. Some of the most popular MoR services include Stripe, PayPal, Braintree, and Adyen.

What are some best practices for implementing MoR in your online marketplace?

To ensure a successful MoR implementation in your online marketplace, it’s important to follow best practices such as:

  • Choose the right MoR service provider
  • Clearly communicate the payment process to vendors and customers
  • Test the payment process thoroughly before launch
  • Monitor payment transactions and respond to any issues promptly
  • Continuously evaluate and improve the payment process


Merchant of Record (MoR) is an essential service for online marketplaces, simplifying payment processing, increasing security and fraud protection, and ensuring compliance with regulations. While there are some potential drawbacks to


A Merchant of Record is a service provider that facilitates online transactions by acting as the legal entity responsible for processing payments, handling tax obligations, and ensuring compliance with local laws and regulations on behalf of sellers on a marketplace.

Online marketplaces need a Merchant of Record to simplify the payment process for sellers and buyers and to mitigate risk and liability associated with processing payments. Additionally, MoR services can help online marketplaces to comply with different regulatory frameworks across different regions.

Using a Merchant of Record for online marketplaces offers several benefits, including easier and faster onboarding of sellers, streamlined payment processes, better compliance with local laws and regulations, improved risk management, and access to data and insights on transactions.

When selecting a Merchant of Record service for your online marketplace, it is essential to consider the provider's experience and expertise in your industry, their reputation and track record, the range of payment methods they support, their pricing and fees, their customer support and service levels, and their ability to scale with your business. It is also important to check their compliance with data privacy and security regulations.

TFE can help you

Curious about the opportunities for your company on the marketplace? Then see what we can do for your business

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