Merchant of Record and Payment Facilitator

on Oct10
merchant of record
Written by
James Davis
Written by James Davis
Senior Technical Writer at United Thinkers

Author of the Paylosophy blog, a veteran writer, and a stock analyst with extensive knowledge and experience in the financial services industry that allows me to cover the latest payment industry news, developments, and insights. Read more

merchant of record
Reviewed by
Kathrine Pensatori
Product Specialist at United Thinkers

Product specialist with more than 10 years of experience in the Payment Processing Industry. I help payment facilitators and PSPs solve their various payment processing issues. Read more


In this article we are going to explain the merchant of record concept. We will also outline the differences between merchants of record and payment facilitators.

Many articles on Paylosophy cover such concepts as payment facilitator, split funding, online marketplaces, branding of payment solutions, and credit card transaction descriptors. The term “merchant of record” or MOR relates to all of the listed concepts. At the same time, we, somehow, never mentioned it on our blog. So, let us start with merchant of record definition and then move on to some explanations and examples.

What is a merchant of record?

A merchant of record is an entity that accepts cardholders’ payments and assumes liability for processing of these payments on the merchant’s behalf. In simple terms, the MOR is the name that the customer (cardholder) sees on the receipt. The name of the MOR, which is not necessarily the name of the product seller, is specified by transaction descriptor. For a short time the MOR actually holds the transaction amount the customer pays at the POS.

Why choose MOR model

Technically, the MOR has to handle plenty of aspects related to electronic payment acceptance. These include

  • taxation,
  • merchant funding,
  • PCI and PA DSS compliance,
  • payment security,
  • deduction of credit card processing fees,
  • management of chargebacks and refunds.

Many small and medium-size merchants cannot afford spending their time and efforts on management of all the listed issues. So, initially, they prefer to operate through larger entities, that is, merchants of record. Then, their business grows and their needs become more sophisticated. As a result, they might find merchant of record model too intrusive and constraining. At this point a merchant might consider becoming its own MOR or switching to another service provider. Potentially, it can be a PayFac, offering a highly customized payment API.

There is also another reason why companies choose to operate though MOR model. They want some reputable and trusted entity to represent them in the eyes of their clients. Typical examples of such reputable companies include Uber and Amazon.


A passenger of Uber cab is charged by Uber, but most of the payment amount goes to the specific driver. A person that purchases products on Amazon pays the marketplace owner and sees the name “Amazon” on the invoice. But the purchased products come from specific vendors, operating through Amazon that distributes payment amounts accordingly.

When it comes to recurring billing companies, it is often the MOR that manages subscriptions and payment plans for them.

In split or chained payments, it is often the MOR that provides the necessary split funding logic and distributes payment amounts among different affiliates.

Finally, in international and multi-currency payments, it is the MOR that has to do currency conversion and manage these payments for the retailer.

Some major companies resort to the services of merchants of record to sell products and services that they do not consider to be the core ones.

Difference between a MOR and a PayFac

As we can see, the functions performed by a merchant of record are similar to those performed by a payment facilitator (check out our PayFac articles series). And, yes, the process of becoming a MOR is almost as labor-intensive and time-consuming as the process of becoming a PayFac. So, what is the difference?

Well, not all merchants of record are PayFacs and vice versa. Payment facilitators are often referred to as master merchants. However, an MOR is not necessarily a master merchant. It can be a sub-merchant of some PayFac as well.


PayPal is a merchant of record for many of its customers. People feel more secure when their cardholder data is handled by such a reputable platform as PayPal and not by some unknown vendors it represents. At the same time, some larger companies, including American Airlines, use the services of PayPal for payment facilitation only. American Airlines can afford to be its own MOR, can’t it?

Stripe and WePay are just PayFacs and not merchants of record in relation to their respective sub-merchants. So, a cardholder, purchasing products or services from these sub-merchants, sees the name of the retailer (sub-merchant) and not of the underlying PayFac (Stripe or WePay) on the invoice.

Historically, payment facilitators emerged to meet the need for underwriting of multiple merchants smoothly and quickly. As a result, prospective merchants eventually got the opportunity to start processing within hours from the moment of application submission. MORs, in contrast to PayFacs, do not perform merchant underwriting functions.

Payment facilitator model is more flexible and lucrative than MOR model, although it involves larger costs and more responsibilities. So, becoming a MOR might be a step on the way to becoming a white-label or full-fledged payment facilitator.


Merchant of record concept is one of the basic concepts of merchant services industry. If you are a small-to-medium-size company, being your own MOR might be a tough task to manage. However, if you are a larger-size business, becoming an MOR or a PayFac for other merchants might be beneficial for you and allow you to make some extra money on merchant services.

Feel free to consult our experts at UniPay Gateway to learn more about how payment facilitation and merchant of record services can work for you. Our short videoguide can help you understand all the benefits of UniPay Gateway solution

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