If you run a SaaS company or digital agency selling services globally, you’ve probably encountered terms like VAT compliance, sales tax nexus, PCI-DSS, and chargebacks. These aren’t just buzzwords – they’re real operational challenges that can derail your growth if not handled properly.
Enter the Merchant of Record (MoR) model: a solution that’s transforming how SaaS companies and agencies manage international payments, tax compliance, and billing complexity. But what exactly is a Merchant of Record, and should your business use one?
This guide breaks down everything you need to know about the MoR model, focusing on the compliance, billing, and invoicing challenges it solves for SaaS businesses and agencies.
A Merchant of Record (MoR) is a legal entity that takes responsibility for processing payments and managing all associated liabilities when selling goods or services. When you work with an MoR, they become the seller of record for your transactions – meaning from a legal standpoint, customers are buying from the MoR, not directly from you.
The MoR handles critical responsibilities, including:
Think of an MoR as taking on the “business of payments” so you can focus on the business of building software or delivering services.
This distinction confuses many business owners. Here’s the key difference:
Payment Processor (like Stripe in its standard configuration):
Provides the technical infrastructure to accept payments, but you remain the merchant of record. You’re legally responsible for tax compliance, chargebacks, refunds, and regulatory requirements.
Merchant of Record (like Paddle, Lemon Squeezy, or PayPro Global):
Takes on legal responsibility for the entire transaction. They handle payment processing AND all associated compliance burdens.
When you use Stripe as a payment processor, you still need to:
With an MoR, these responsibilities shift to the MoR provider. You get paid a portion of revenue (minus the MoR’s fee), and they handle everything else.
Let’s talk about why compliance has become such a massive challenge for SaaS companies and digital agencies.
According to research on EU VAT compliance for SaaS businesses, payment processors must now report all cross-border transaction data to tax authorities, making compliance more stringent than ever.
When selling software or digital services internationally, you face a maze of tax requirements:
EU VAT obligations: Each country has its own requirements for invoicing, currency, and customer details, with mistakes potentially causing audits, fines, or even frozen accounts. If you sell to customers in Germany, France, Spain, and other EU countries, you might need to:
U.S. sales tax complexity: The U.S. has over 10,000 tax jurisdictions. States like California, Texas, and New York now require SaaS companies to collect sales tax. Economic nexus rules mean you might need to register in states where you have no physical presence, simply because you exceeded revenue thresholds.
Other jurisdictions: Canada has GST, Australia has GST, India has GST, and dozens of other countries have their own digital services taxes. Each operates differently.
For a small SaaS company or agency, navigating this alone is overwhelming. You either hire expensive tax consultants or risk non-compliance with serious financial consequences.
Many SaaS businesses and agencies struggle with creating compliant invoices for international clients. The requirements vary dramatically by country and client type.
If you’re a freelancer or small agency without a formal company structure, you face additional challenges. You might be wondering how to invoice clients as a freelancer without running into compliance issues. The reality is that creating professional invoices requires understanding local tax laws, proper formatting, and often, business registration.
For those exploring whether they can invoice without a company, the answer varies by jurisdiction. While it’s legal in many places to invoice as a sole proprietor or independent contractor, challenges arise when dealing with international clients who require specific invoice formats, VAT numbers, or company registration details.
The complexity multiplies when you need to invoice clients without a company across borders. Different countries require different invoice elements – some need tax ID numbers, others require specific legal language, and many have strict formatting rules.
An MoR solves this by issuing compliant invoices on your behalf. They handle the varying requirements for each jurisdiction, ensuring your clients receive proper documentation for their accounting and tax purposes.
To ensure correct and safe handling of sensitive payment information when processing payments, a Merchant of Record is subject to various compliance regulations, such as the Payment Card Industry Data Security Standards (PCI DSS).
If you handle credit card data yourself, you must maintain PCI-DSS compliance. This involves:
For SaaS companies, achieving and maintaining PCI-DSS compliance can cost $50,000-100,000 annually when factoring in security infrastructure, audits, and staff training.
MoRs are already PCI-DSS compliant. When they process payments, customer card data never touches your systems, eliminating this compliance burden entirely.
Staying compliant with AML rules becomes far more complicated across borders. Financial regulators worldwide require businesses to verify customer identities and monitor transactions for suspicious activity.
For SaaS businesses handling payments from hundreds or thousands of customers globally, implementing robust AML/KYC processes is complex and expensive. MoRs have these systems built in, as they’re required to comply with financial regulations as payment facilitators.
European GDPR and similar privacy regulations globally create obligations around how you collect, store, and process customer data- including payment information.
When an MoR handles payments, they typically take on primary responsibility for payment data privacy compliance. You still have obligations around other customer data, but payment-related GDPR compliance shifts to the MoR.
Beyond compliance, SaaS businesses and agencies face practical billing challenges that MoRs address.
Digital service providers, including SaaS vendors, content platforms, and subscription services, are increasingly investing in merchants of record compliance solutions to manage recurring billing and handle international tax obligations.
SaaS subscription billing involves:
MoR platforms like Paddle and PayPro Global specialize in subscription billing. They have built-in dunning management, automated failed payment recovery, and sophisticated prorating logic.
If you want to sell globally, you need to accept payments in local currencies. The MoR manages payments in multiple currencies, eliminating the need for businesses to set up local merchant accounts in each country they operate in.
Setting up merchant accounts in dozens of currencies yourself means:
MoRs consolidate this. They accept payments in 100+ currencies, handle conversion, and pay you in your preferred currency (or currencies). The complexity of multi-currency operations disappears from your plate.
Different regions prefer different payment methods. In the Netherlands, iDEAL dominates. In Germany, SOFORT is popular. In Brazil, Boleto Bancário is common. In Southeast Asia, GrabPay and GCash matter.
MoRs are already set up to accept payments in a wide variety of methods, including those that may only be popular locally. This is crucial because offering local payment methods significantly increases conversion rates.
Setting up these payment methods yourself requires separate integrations, compliance checks, and ongoing maintenance. MoRs have done this work already, giving you immediate access to global payment methods.
Chargeback fees are designed to cover the administrative costs associated with handling disputes, which are labor-intensive and time-consuming.
Chargebacks occur when customers dispute charges with their bank. For SaaS companies, common chargeback scenarios include:
Each chargeback involves:
The MoR takes full responsibility for managing chargebacks, disputes, and refunds, allowing businesses to focus on growth instead of dealing with customer issues.
This is significant. High chargeback rates can get your payment processing shut down. MoRs absorb this risk and handle the administrative burden.
The Merchant of Record compliance market is experiencing massive growth, reflecting how critical this solution has become. The global Merchant of Record Compliance market size reached USD 8.2 billion in 2024 and is expanding at a CAGR of 13.7% during the forecast period, anticipated to attain approximately USD 25.3 billion by 2033 (Source).
This growth is driven by:
E-commerce remains the largest application area, driven by the exponential growth of online retail and the increasing complexity of cross-border transactions.
For SaaS specifically, the global SaaS industry is expected to reach $819 billion by 2030, making cross-border sales and compliance management more critical than ever (Source).
MoRs solve enormous problems, but they come with important trade-offs. Understanding these helps you make an informed decision.
MoRs charge more than simple payment processors. Typical costs:
The higher fee reflects the MoR taking on tax compliance, chargebacks, fraud risk, and regulatory responsibility. For many businesses, paying 3-5% more is worth it to avoid hiring tax consultants, compliance staff, and dealing with audits.
When working with an MoR, the money from your customers does not flow directly to you. From a legal standpoint, customers are buying from the MoR. Your brand appears on the checkout and product, but the MoR’s name appears on credit card statements and invoices.
This can create questions like:
Reputable MoRs work to minimize this confusion through co-branding and clear communication, but it’s a trade-off.
Changing your payment provider later can be difficult. For example, moving from Paddle to Stripe or the other way around is challenging.
When you use an MoR, they own the customer payment relationships. Switching to a different provider or bringing payments in-house requires:
This creates lock-in. Choose your MoR carefully, as switching later is complicated and risky.
Revenue flows through the MoR and affects fundraising, selling your company, or reporting to investors.
For accounting and investor reporting purposes, some businesses find MoR revenue recognition more complex. The MoR bills customers and then pays you. Depending on how your accounting is structured, this can affect:
Work with your accountant to ensure MoR revenue flows are properly structured for your reporting needs.
MoRs make sense for specific business profiles. Here’s who benefits most:
If you’re a founder or small team focused on product development and customer acquisition, an MoR is ideal. If your business is new or small, a Merchant of Record platform can save a lot of time and avoid problems.
Instead of spending months learning tax laws in dozens of jurisdictions, you launch with an MoR and start selling globally immediately. The biggest benefit is speed. If you identify an opportunity in a new market, you want to jump on it fast–before a competitor beats you to it. Instead of spending months learning tax laws and setting up compliance in new countries, you can start selling immediately.
Agencies that have evolved from pure services into offering SaaS products, tools, or subscription-based services face the same compliance challenges as SaaS companies. An MoR allows you to add these revenue streams without building an entire finance and compliance infrastructure.
If you don’t have (and don’t want to hire) tax specialists, compliance experts, and payment operations staff, an MoR handles these functions. The cost of the MoR fee is often less than the cost of hiring specialized staff.
Growing SaaS companies, ecommerce businesses, and other subscription services often use MoRs as a shortcut to quickly launching in new international markets without having to build compliance systems in-house.
If you’re based in the U.S. and want to sell in Europe, or vice versa, an MoR eliminates months of legal, tax, and payment setup work.
Certain businesses are better off managing payments themselves:
If your SaaS is larger, complicated, or has internal finance help, Stripe may be a better fit.
When you have the resources to hire tax specialists, build compliance systems, and negotiate favorable payment processing rates (below 2%), keeping payments in-house can be more cost-effective.
Companies like Salesforce, Adobe, and HubSpot manage their own merchant of record status because they have the scale and expertise to do it efficiently.
If you need total control over payment flows, custom pricing models that MoR platforms don’t support, or specific integrations with proprietary systems, being your own merchant of record gives you more flexibility.
If you only sell in one country and don’t plan international expansion, the compliance complexity is much lower. A standard payment processor might suffice.
If you’ve decided an MoR makes sense, here’s what to evaluate:
Paddle focuses specifically on SaaS businesses and offers comprehensive subscription billing, tax compliance, and fraud prevention services, including handling complex subscription scenarios like upgrades, downgrades, and dunning management.
Look for MoRs that understand SaaS business models, recurring revenue, and subscription lifecycle management. Generic payment platforms won’t have the specialized features you need.
Verify that the MoR supports the regions where you sell or plan to sell. Some MoRs focus on specific markets (EU, North America, etc.), while others are truly global.
MoR fees vary significantly. Compare:
Get full pricing upfront to avoid surprises.
Varying tax regulations across different jurisdictions create a complex landscape, making compliance a difficult and time-consuming task, with failure potentially resulting in substantial fines and penalties.
Ask potential MoRs:
You’ll need help during integration and ongoing operations. Evaluate:
You need visibility into your revenue, subscriptions, churn, and other metrics. Ensure the MoR provides:
One of the primary challenges is the rapidly evolving and fragmented regulatory landscape, which makes it difficult for businesses to stay up-to-date with the latest requirements and ensure continuous compliance.
Even MoRs face ongoing challenges:
Regulatory changes: Tax laws and compliance requirements change constantly. MoRs must adapt quickly, and sometimes there’s a lag time.
Cross-border complexity: As a result of dealing with different currency exchange rates and fluctuations, Merchants of Record are faced with extensive complexity in ensuring accurate financial reporting and mitigating currency risks.
Platform limitations: Some MoRs have feature gaps or don’t support specific use cases. You might need to work around platform constraints.
Cost for small businesses: The high cost of implementing and maintaining advanced compliance solutions may be a barrier for small and medium enterprises, particularly in emerging markets.
Understanding these challenges helps you set realistic expectations and choose an MoR that addresses them well.
The MoR landscape is evolving rapidly:
Stripe’s entry:
Stripe has started offering limited Merchant of Record services for SaaS through its Stripe Managed Payments for SaaS, which manages tax compliance, acting as the MoR for specific transaction types or regions while maintaining your brand on invoices. This is rolling out gradually, but signals that major payment processors recognize the value of the MoR model.
Consolidation and acquisitions:
Lemon Squeezy was acquired by Stripe in 2023, and the platform has faced integration challenges and reduced feature development, with many features being consolidated into Stripe’s broader Merchant of Record offerings. Expect more M&A activity as the market matures.
Specialized solutions:
MoRs are becoming more specialized by industry (SaaS, digital goods, content creators, etc.) and region, offering tailored features for specific business types.
Enhanced analytics: Next-generation MoR platforms are investing heavily in data analytics, revenue intelligence, and growth optimization tools beyond just payment processing and compliance.
The Merchant of Record model offers a powerful solution to the compliance, billing, and invoicing challenges facing SaaS companies and digital agencies operating globally.
The core value proposition is simple: Trade a higher transaction fee (typically 3-5% more than basic payment processing) for comprehensive handling of tax compliance, payment operations, regulatory requirements, and customer billing across all jurisdictions.
You should strongly consider an MoR if:
You might not need an MoR if:
The regulatory landscape continues to become more complex. The lack of standardized regulations across regions and industries can lead to confusion, increased compliance costs, and operational inefficiencies. For most SaaS businesses and agencies, partnering with a reputable MoR removes a massive operational burden and lets you focus on what actually drives your business forward: building great products and serving customers.
As you evaluate this decision, start by assessing your current pain points around compliance, invoicing, and payment operations. Calculate the true cost of managing these in-house (including staff time, external consultants, and risk of non-compliance). Compare that to MoR fees for your expected transaction volume.
For many businesses, the math is clear: an MoR is not just a convenience, but a strategic enabler of global growth.
Platforms like Remotify offer payment intermediary services that help businesses and independent professionals manage invoicing and payments globally without the complexity of building an extensive compliance infrastructure.
A Merchant of Record (MoR) is a legal entity that takes responsibility for processing payments and managing all associated liabilities when selling goods or services. When you work with an MoR, they become the seller of record for your transactions – meaning from a legal standpoint, customers are buying from the MoR, not directly from you.
The MoR handles critical responsibilities, including:
Think of an MoR as taking on the “business of payments” so you can focus on the business of building software or delivering services.
This distinction confuses many business owners. Here’s the key difference:
Payment Processor (like Stripe in its standard configuration):
Provides the technical infrastructure to accept payments, but you remain the merchant of record. You’re legally responsible for tax compliance, chargebacks, refunds, and regulatory requirements.
Merchant of Record (like Paddle, Lemon Squeezy, or PayPro Global):
Takes on legal responsibility for the entire transaction. They handle payment processing AND all associated compliance burdens.
When you use Stripe as a payment processor, you still need to:
With an MoR, these responsibilities shift to the MoR provider. You get paid a portion of revenue (minus the MoR’s fee), and they handle everything else.
Let’s talk about why compliance has become such a massive challenge for SaaS companies and digital agencies.
According to research on EU VAT compliance for SaaS businesses, payment processors must now report all cross-border transaction data to tax authorities, making compliance more stringent than ever.
When selling software or digital services internationally, you face a maze of tax requirements:
EU VAT obligations: Each country has its own requirements for invoicing, currency, and customer details, with mistakes potentially causing audits, fines, or even frozen accounts. If you sell to customers in Germany, France, Spain, and other EU countries, you might need to:
U.S. sales tax complexity: The U.S. has over 10,000 tax jurisdictions. States like California, Texas, and New York now require SaaS companies to collect sales tax. Economic nexus rules mean you might need to register in states where you have no physical presence, simply because you exceeded revenue thresholds.
Other jurisdictions: Canada has GST, Australia has GST, India has GST, and dozens of other countries have their own digital services taxes. Each operates differently.
For a small SaaS company or agency, navigating this alone is overwhelming. You either hire expensive tax consultants or risk non-compliance with serious financial consequences.
Many SaaS businesses and agencies struggle with creating compliant invoices for international clients. The requirements vary dramatically by country and client type.
If you’re a freelancer or small agency without a formal company structure, you face additional challenges. You might be wondering how to invoice clients as a freelancer without running into compliance issues. The reality is that creating professional invoices requires understanding local tax laws, proper formatting, and often, business registration.
For those exploring whether they can invoice without a company, the answer varies by jurisdiction. While it’s legal in many places to invoice as a sole proprietor or independent contractor, challenges arise when dealing with international clients who require specific invoice formats, VAT numbers, or company registration details.
The complexity multiplies when you need to invoice clients without a company across borders. Different countries require different invoice elements – some need tax ID numbers, others require specific legal language, and many have strict formatting rules.
An MoR solves this by issuing compliant invoices on your behalf. They handle the varying requirements for each jurisdiction, ensuring your clients receive proper documentation for their accounting and tax purposes.
To ensure correct and safe handling of sensitive payment information when processing payments, a Merchant of Record is subject to various compliance regulations, such as the Payment Card Industry Data Security Standards (PCI DSS).
If you handle credit card data yourself, you must maintain PCI-DSS compliance. This involves:
For SaaS companies, achieving and maintaining PCI-DSS compliance can cost $50,000-100,000 annually when factoring in security infrastructure, audits, and staff training.
MoRs are already PCI-DSS compliant. When they process payments, customer card data never touches your systems, eliminating this compliance burden entirely.
Staying compliant with AML rules becomes far more complicated across borders. Financial regulators worldwide require businesses to verify customer identities and monitor transactions for suspicious activity.
For SaaS businesses handling payments from hundreds or thousands of customers globally, implementing robust AML/KYC processes is complex and expensive. MoRs have these systems built in, as they’re required to comply with financial regulations as payment facilitators.
European GDPR and similar privacy regulations globally create obligations around how you collect, store, and process customer data- including payment information.
When an MoR handles payments, they typically take on primary responsibility for payment data privacy compliance. You still have obligations around other customer data, but payment-related GDPR compliance shifts to the MoR.
Beyond compliance, SaaS businesses and agencies face practical billing challenges that MoRs address.
Digital service providers, including SaaS vendors, content platforms, and subscription services, are increasingly investing in merchants of record compliance solutions to manage recurring billing and handle international tax obligations.
SaaS subscription billing involves:
MoR platforms like Paddle and PayPro Global specialize in subscription billing. They have built-in dunning management, automated failed payment recovery, and sophisticated prorating logic.
If you want to sell globally, you need to accept payments in local currencies. The MoR manages payments in multiple currencies, eliminating the need for businesses to set up local merchant accounts in each country they operate in.
Setting up merchant accounts in dozens of currencies yourself means:
MoRs consolidate this. They accept payments in 100+ currencies, handle conversion, and pay you in your preferred currency (or currencies). The complexity of multi-currency operations disappears from your plate.
Different regions prefer different payment methods. In the Netherlands, iDEAL dominates. In Germany, SOFORT is popular. In Brazil, Boleto Bancário is common. In Southeast Asia, GrabPay and GCash matter.
MoRs are already set up to accept payments in a wide variety of methods, including those that may only be popular locally. This is crucial because offering local payment methods significantly increases conversion rates.
Setting up these payment methods yourself requires separate integrations, compliance checks, and ongoing maintenance. MoRs have done this work already, giving you immediate access to global payment methods.
Chargeback fees are designed to cover the administrative costs associated with handling disputes, which are labor-intensive and time-consuming.
Chargebacks occur when customers dispute charges with their bank. For SaaS companies, common chargeback scenarios include:
Each chargeback involves:
The MoR takes full responsibility for managing chargebacks, disputes, and refunds, allowing businesses to focus on growth instead of dealing with customer issues.
This is significant. High chargeback rates can get your payment processing shut down. MoRs absorb this risk and handle the administrative burden.
The Merchant of Record compliance market is experiencing massive growth, reflecting how critical this solution has become. The global Merchant of Record Compliance market size reached USD 8.2 billion in 2024 and is expanding at a CAGR of 13.7% during the forecast period, anticipated to attain approximately USD 25.3 billion by 2033 (Source).
This growth is driven by:
E-commerce remains the largest application area, driven by the exponential growth of online retail and the increasing complexity of cross-border transactions.
For SaaS specifically, the global SaaS industry is expected to reach $819 billion by 2030, making cross-border sales and compliance management more critical than ever (Source).
MoRs solve enormous problems, but they come with important trade-offs. Understanding these helps you make an informed decision.
MoRs charge more than simple payment processors. Typical costs:
The higher fee reflects the MoR taking on tax compliance, chargebacks, fraud risk, and regulatory responsibility. For many businesses, paying 3-5% more is worth it to avoid hiring tax consultants, compliance staff, and dealing with audits.
When working with an MoR, the money from your customers does not flow directly to you. From a legal standpoint, customers are buying from the MoR. Your brand appears on the checkout and product, but the MoR’s name appears on credit card statements and invoices.
This can create questions like:
Reputable MoRs work to minimize this confusion through co-branding and clear communication, but it’s a trade-off.
Changing your payment provider later can be difficult. For example, moving from Paddle to Stripe or the other way around is challenging.
When you use an MoR, they own the customer payment relationships. Switching to a different provider or bringing payments in-house requires:
This creates lock-in. Choose your MoR carefully, as switching later is complicated and risky.
Revenue flows through the MoR and affects fundraising, selling your company, or reporting to investors.
For accounting and investor reporting purposes, some businesses find MoR revenue recognition more complex. The MoR bills customers and then pays you. Depending on how your accounting is structured, this can affect:
Work with your accountant to ensure MoR revenue flows are properly structured for your reporting needs.
MoRs make sense for specific business profiles. Here’s who benefits most:
If you’re a founder or small team focused on product development and customer acquisition, an MoR is ideal. If your business is new or small, a Merchant of Record platform can save a lot of time and avoid problems.
Instead of spending months learning tax laws in dozens of jurisdictions, you launch with an MoR and start selling globally immediately. The biggest benefit is speed. If you identify an opportunity in a new market, you want to jump on it fast–before a competitor beats you to it. Instead of spending months learning tax laws and setting up compliance in new countries, you can start selling immediately.
Agencies that have evolved from pure services into offering SaaS products, tools, or subscription-based services face the same compliance challenges as SaaS companies. An MoR allows you to add these revenue streams without building an entire finance and compliance infrastructure.
If you don’t have (and don’t want to hire) tax specialists, compliance experts, and payment operations staff, an MoR handles these functions. The cost of the MoR fee is often less than the cost of hiring specialized staff.
Growing SaaS companies, ecommerce businesses, and other subscription services often use MoRs as a shortcut to quickly launching in new international markets without having to build compliance systems in-house.
If you’re based in the U.S. and want to sell in Europe, or vice versa, an MoR eliminates months of legal, tax, and payment setup work.
Certain businesses are better off managing payments themselves:
If your SaaS is larger, complicated, or has internal finance help, Stripe may be a better fit.
When you have the resources to hire tax specialists, build compliance systems, and negotiate favorable payment processing rates (below 2%), keeping payments in-house can be more cost-effective.
Companies like Salesforce, Adobe, and HubSpot manage their own merchant of record status because they have the scale and expertise to do it efficiently.
If you need total control over payment flows, custom pricing models that MoR platforms don’t support, or specific integrations with proprietary systems, being your own merchant of record gives you more flexibility.
If you only sell in one country and don’t plan international expansion, the compliance complexity is much lower. A standard payment processor might suffice.
If you’ve decided an MoR makes sense, here’s what to evaluate:
Paddle focuses specifically on SaaS businesses and offers comprehensive subscription billing, tax compliance, and fraud prevention services, including handling complex subscription scenarios like upgrades, downgrades, and dunning management.
Look for MoRs that understand SaaS business models, recurring revenue, and subscription lifecycle management. Generic payment platforms won’t have the specialized features you need.
Verify that the MoR supports the regions where you sell or plan to sell. Some MoRs focus on specific markets (EU, North America, etc.), while others are truly global.
MoR fees vary significantly. Compare:
Get full pricing upfront to avoid surprises.
Varying tax regulations across different jurisdictions create a complex landscape, making compliance a difficult and time-consuming task, with failure potentially resulting in substantial fines and penalties.
Ask potential MoRs:
You’ll need help during integration and ongoing operations. Evaluate:
You need visibility into your revenue, subscriptions, churn, and other metrics. Ensure the MoR provides:
One of the primary challenges is the rapidly evolving and fragmented regulatory landscape, which makes it difficult for businesses to stay up-to-date with the latest requirements and ensure continuous compliance.
Even MoRs face ongoing challenges:
Regulatory changes: Tax laws and compliance requirements change constantly. MoRs must adapt quickly, and sometimes there’s a lag time.
Cross-border complexity: As a result of dealing with different currency exchange rates and fluctuations, Merchants of Record are faced with extensive complexity in ensuring accurate financial reporting and mitigating currency risks.
Platform limitations: Some MoRs have feature gaps or don’t support specific use cases. You might need to work around platform constraints.
Cost for small businesses: The high cost of implementing and maintaining advanced compliance solutions may be a barrier for small and medium enterprises, particularly in emerging markets.
Understanding these challenges helps you set realistic expectations and choose an MoR that addresses them well.
The MoR landscape is evolving rapidly:
Stripe’s entry:
Stripe has started offering limited Merchant of Record services for SaaS through its Stripe Managed Payments for SaaS, which manages tax compliance, acting as the MoR for specific transaction types or regions while maintaining your brand on invoices. This is rolling out gradually, but signals that major payment processors recognize the value of the MoR model.
Consolidation and acquisitions:
Lemon Squeezy was acquired by Stripe in 2023, and the platform has faced integration challenges and reduced feature development, with many features being consolidated into Stripe’s broader Merchant of Record offerings. Expect more M&A activity as the market matures.
Specialized solutions:
MoRs are becoming more specialized by industry (SaaS, digital goods, content creators, etc.) and region, offering tailored features for specific business types.
Enhanced analytics: Next-generation MoR platforms are investing heavily in data analytics, revenue intelligence, and growth optimization tools beyond just payment processing and compliance.
The Merchant of Record model offers a powerful solution to the compliance, billing, and invoicing challenges facing SaaS companies and digital agencies operating globally.
The core value proposition is simple: Trade a higher transaction fee (typically 3-5% more than basic payment processing) for comprehensive handling of tax compliance, payment operations, regulatory requirements, and customer billing across all jurisdictions.
You should strongly consider an MoR if:
You might not need an MoR if:
The regulatory landscape continues to become more complex. The lack of standardized regulations across regions and industries can lead to confusion, increased compliance costs, and operational inefficiencies. For most SaaS businesses and agencies, partnering with a reputable MoR removes a massive operational burden and lets you focus on what actually drives your business forward: building great products and serving customers.
As you evaluate this decision, start by assessing your current pain points around compliance, invoicing, and payment operations. Calculate the true cost of managing these in-house (including staff time, external consultants, and risk of non-compliance). Compare that to MoR fees for your expected transaction volume.
For many businesses, the math is clear: an MoR is not just a convenience, but a strategic enabler of global growth.
Platforms like Remotify offer payment intermediary services that help businesses and independent professionals manage invoicing and payments globally without the complexity of building an extensive compliance infrastructure.
