Seller and Merchant of Record
One of the easiest ways to expand globally is by partnering with ModusLink as your Merchant of Record (MOR). An MOR is a legal entity authorized by a financial institution to process customer credit card, debit card, or alternative payment transactions.
As your Merchant of Record, we handle local taxes (such as VAT, GST, service tax, etc.) in over 50 countries—managing everything from tax collection and accounting to payments made to local authorities.
Our tax-related responsibilities as your MOR:
- We handle local taxes (such as VAT, GST, service tax, and more) in over 50 countries, ensuring compliance by collecting, accounting for, and remitting taxes to the appropriate local authorities.
- Monitoring the sales tax thresholds in the jurisdictions where sales tax is introduced; and apply for local tax registration.
- Appointing tax agents and representatives in jurisdictions that require one (an external cost that can exceed thousands of dollars a year).
- Reporting and remitting the sales tax to the local tax authorities (a monthly or quarterly process among over 50 different countries involving cross-border funds transfers in multiple currencies).
How we safeguard fraud and ensure compliance:
- ModusLink employs a two-layer approach to protect against fraud: our trusted payment providers and proprietary software with advanced algorithms.
- We proce
- ss customer transactions through multiple payment providers, each equipped with top-tier anti-fraud solutions. Our anti-fraud software ensures secure payments and prevents fraudulent checkout activities.
- Additionally, we use Payment Card Industry (PCI)-compliant providers for processing credit and debit card transactions, adding another layer of security through third-party tokenization services.
- We fully adhere to the PCI Data Security Standard to guarantee the highest level of protection for our customers.
Offload the complexities. Gain the expertise.
Managing and paying taxes is becoming increasingly complex each year. With over 50 countries requiring local tax compliance, the growing number of eCommerce customers brings more financial liabilities and payment challenges.
Unlike standard payment service providers like PayPal, which only process payments, ModusLink handles everything—ensuring your compliance with local laws and taxes. Our team of experts is well-versed in the culture, laws, and regulations of every country where your business operates online.
We manage all the intricacies unique to global online markets, from payment options and consumer protection disclosures to export restrictions and regulatory fees. Trust ModusLink to take care of the complexities of being your Merchant of Record, safeguarding you from potential fines, penalties, and legal issues.
Did you know?
This shift means that tax rates and applicable transaction types can vary depending on both the customer’s location and the country in which they reside.
Seller and Merchant of Record
Simplifying Global E-Commerce with ModusLink as Your Merchant of Record
The global e-commerce landscape is growing rapidly, offering businesses unprecedented opportunities. However, expanding into international markets comes with a set of complexities, including technical requirements, regulations, and administrative tasks. ModusLink simplifies global commerce by operating as your Merchant of Record (MOR), enabling your business to focus on growth while we manage compliance, payment processing, and tax obligations on your behalf.
What Is a Merchant of Record (MOR)?
A Merchant of Record is a legal entity authorized to process customer transactions, including credit and debit card payments, on behalf of an e-commerce business. The MOR is held liable by banks for processing payments, ensuring tax compliance, and handling various financial and regulatory obligations.
While some businesses may choose to be their own MOR, this process can be slow, costly, and cumbersome—especially for companies seeking to expand quickly into foreign markets. Many businesses partner with a third-party MOR provider to expedite global expansion, mitigate risks, and streamline financial operations.
Five Key Benefits of Partnering with ModusLink as Your MOR:
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Tax Management and Reporting Different countries have unique tax regulations, and failure to comply can lead to costly penalties. ModusLink ensures that you stay up to date with global tax codes, preventing inadvertent tax fraud while handling the complexities of VAT, GST, and other local taxes.
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Compliance Management and Reporting E-commerce businesses often face regulatory challenges, especially when operating in multiple jurisdictions. ModusLink’s expertise in local payment regulations ensures you comply with the diverse payment rules and reporting requirements worldwide.
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Payment Method Relationship Management Handling payment gateway contracts and processing fees can be time-consuming and expensive. As your MOR, ModusLink manages relationships with global payment providers, reducing your operational burden and helping you avoid costly fees.
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Settlement Management Maintaining accurate records of payment transfers and tax obligations is vital. ModusLink automates settlement processes, making it easier to determine how much is owed, manage payments, and account for taxes across multiple countries.
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Fiscal Representation For regions like the European Union, having a fiscal representative is crucial for managing customs processes and avoiding overpayment of taxes. ModusLink acts as your fiscal representative, ensuring compliance with local tax and import regulations.
The Challenges of Being Your Own Merchant of Record
Managing payments, taxes, and compliance on your own can be overwhelming. To be your own MOR, you must:
- Open merchant accounts with acquiring banks.
- Install payment gateways and manage contracts with payment providers.
- Comply with PCI DSS standards.
- Handle complex global taxation requirements, including sales tax collection and remittance.
For small and medium-sized businesses, navigating these complexities is costly and time-consuming. When operating across borders, the difficulty increases. Businesses must deal with multiple payment providers, each with different rates and currencies, and establish contracts for each region.
Additionally, the challenge of handling tax policy changes and currency fluctuations can drain resources and lead to costly errors. Many companies overlook these challenges, only to realize that managing them requires expertise that goes beyond finance and IT departments.
The Complexity of Expanding Globally as Your Own MOR
As your business grows internationally, managing payments, taxes, and compliance becomes even more difficult. For each market, businesses must:
- Set up international merchant accounts.
- Sign contracts for multiple currencies and payment methods.
- Stay on top of rapidly changing tax regulations and local laws.
The additional financial burden of global expansion can be overwhelming without the right infrastructure. A third-party Merchant of Record provider simplifies this process, helping you focus on your core business and customers.
The Benefits of Partnering with a Third-Party MOR
By partnering with ModusLink, you can:
- Avoid the complexities of setting up and managing merchant accounts in multiple countries.
- Eliminate the need for ongoing negotiations with payment providers and acquirers.
- Reduce the risk of tax compliance errors and penalties by relying on our global expertise.
Our global team handles everything from payment processing and tax collection to settlement management and fiscal representation, allowing you to focus on scaling your business.
The Importance of Partnering with an Experienced Merchant of Record
To succeed in the global e-commerce market, you need the right infrastructure, compliance expertise, and financial management systems. ModusLink’s Merchant of Record services provide the knowledge and support necessary for smooth international expansion. We manage the technical and regulatory complexities of global commerce, allowing you to deliver seamless customer experiences and build stronger, more loyal customer relationships.
By leveraging ModusLink as your MOR, you’ll ensure compliance, reduce administrative burdens, and streamline your global operations—setting your business up for long-term success.