Merchant of Record: A Global Selling Guide (2026)

The merchant of record (MoR) in a retail transaction is the entity legally responsible for a customer transaction. It assumes the financial and legal obligations for payment.

Cross-border ecommerce is widespread. In a 2025 Avalara and Censuswide survey of more than 900 retail, manufacturing, and logistics executives at organizations with revenues of $5 million or more, 91% said their organization sells and ships cross-border. A merchant of record is often used as the legal seller for companies entering markets outside their home country.

This guide explains how the merchant=of=record model works, what an MoR manages, and the factors to consider before choosing one.

What is a merchant of record (MoR)?

The merchant of record (MoR) in a retail transaction is the company (not necessarily the brand) that sells products or services to the final customer, and the legal entity those customers pay when making a purchase. The MoR takes on the financial responsibility and liability of payments, billing, sales, taxes, refunds, and chargebacks.

In a traditional business transaction, most brands act as their own MoR by default, as they are solely responsible for their own sales, taxes, and refunds. 

You can continue to act as your own MoR, but as you sell globally each new market will bring a whole new set of financial and legal complexity that can slow down your business. Alternatively, a third-party solution like Shopify Managed Markets can act as an MoR on your behalf.

Using a third-party MoR allows you to focus on other parts of your business, like creating great products and developing marketing to drive awareness to overseas customers.

Managing your own global selling vs. using an MoR

The two models differ in who owns the legal and financial responsibilities for each sale.

The MoR’s exact responsibilities depend on the provider agreement. An MoR and an importer of record are separate roles. The contract must state who handles customs declarations and import duties.

Acting as your own MoR

When your company is the MoR, it’s the legal seller for every customer transaction. Your responsibilities include:

• Registering for and collecting required taxes
• Meeting Payment Card Industry Data Security Standard (PCI DSS) requirements
• Processing chargebacks and refunds
• Paying card processing fees
• Following local import rules
• Reviewing international orders for fraud
• Covering currency changes on refunds

If your business also manages its own US imports, it is responsible for calculating each order’s landed cost. Effective August 29, 2025, U.S. Customs and Border Protection ended de minimis duty-free treatment for goods valued at $800 or less imported from any country. Affected imports are now subject to applicable duties, taxes, and fees.

Self-managed sellers must account for changes like this in their import processes. Operating across several markets also involves local registrations, trained staff, and payment infrastructure.

Using an MoR to sell globally

An MoR provider serves as the legal seller for an international customer transaction. It processes the payment and handles the tax and financial responsibilities covered by the provider agreement. The MoR’s name appears on the customer’s payment statement.

Under a common physical-goods MoR arrangement, the sale follows this sequence:

1. An international customer orders through your ecommerce website.
2. The MoR collects the payment and applicable taxes or duties.
3. The MoR takes title to the goods and resells them to the customer.
4. Your business receives the order and handles fulfillment.
5. The MoR sends your revenue after subtracting taxes and agreed fees.

MoR providers use established entities, bank accounts, and payment infrastructure in the markets they cover. This setup allows them to process local-currency payments and use local acquiring where available. The customer’s bank and payment method determine whether an FX fee applies.

Your business manages inventory and fulfills each order. It also controls the storefront and product marketing. The provider agreement defines fees, settlement timing, customer data access, refunds, and post-purchase communication.

Benefits of using an MoR

Enterprise merchants can evaluate an MoR across the following four areas.

Launch markets faster

An MoR already has local entities and payment accounts in the markets it serves. The provider also holds the tax registrations used for those sales. 

Working with an MoR provider shortens the time between selecting a market and accepting the first order. Compare each provider’s launch timeline and country coverage.

Offer payment methods used in each market

Consumer payment preferences change as new options emerge. For example, Worldpay’s "Global Payments Report 2026" estimates that digital wallets accounted for 77% of ecommerce transaction value in Asia-Pacific during 2025. The share was 38% in Europe and 23% in Latin America.

An MoR offers the currencies and payment methods included in its local payment setup. Compare its coverage with the methods customers use in each target country.

Show full order costs before payment

Baymard Institute found that 39% of users abandoned checkout because extra costs such as shipping, taxes, and fees were too high. 

When an MoR calculates duties and taxes before payment, the checkout displays the full order cost before the customer places an order. For physical goods, confirm that the agreement covers customs duties as well as transaction taxes.

Transfer covered fraud and chargeback liability

MRC’s "2025 Global eCommerce Payments and Fraud Report" found that refund or policy abuse affected 47% of surveyed merchants worldwide. First-party misuse, such as falsely disputing a legitimate purchase, affected 39%.

An MoR handles the fraud screening, refunds, and chargeback disputes covered by its agreement. The contract determines which losses the MoR pays. Review chargeback liability, refund funding, and reserve requirements.

When you should use an MoR

Use an MoR when customers in another country want to buy, but your business lacks the local payment and tax setup for those orders. The Avalara and Censuswide 2025 survey found that 35% struggle to calculate duties and taxes, and another 22% do not display full landed costs. An MoR with these services calculates the charges and displays the landed cost at checkout.

Tariffs and trade regulations were also a major barrier in a 2026 Passport Global and Drive Research survey of 200 US, UK, and Canadian ecommerce leaders. Thirty-five percent cited this challenge, while shipping costs ranked first at 43% and delivery speed ranked second at 37%. 

When the contract includes import duties, the MoR calculates those charges for the transaction. Shipping costs and delivery speed depend on the carrier and fulfillment setup.

Consider an MoR when there’s:

• Established domestic sales and consistent demand from a specific international market
• Lower conversion in markets with limited local payment options
• Customer complaints about duties or taxes charged at delivery
• Repeated tax registration and payment setup for each new market
• Rising staff time spent on international refunds, fraud cases, and chargebacks
• Plans to test demand before establishing a local entity or opening a physical location

Managed Markets: Shopify’s merchant-of-record option for eligible global selling

Shopify Managed Markets uses Global-e as the merchant of record for eligible cross-border orders. It’s available to eligible businesses based in the continental US and selected businesses in Canada and the UK through early access. 

Stores have to use Shopify Payments, have an online store, and subscribe to the Basic plan or higher. Log in to check eligibility.

What Managed Markets handles

• Liability: Global-e is the legal seller and manages applicable tax filing and remittance.
• Duties and taxes: Managed Markets calculates and collects import costs at checkout. Shopify guarantees the calculated amount.
• Product restrictions: Country-specific controls prevent customers from purchasing products restricted in their destination.
• Fraud and chargebacks: Eligible US orders receive Shopify Protect coverage for fraudulent and unrecognized chargebacks.
• Payment localization: Customers can pay in local currencies with payment methods available in their market.
• Shipping: Managed Markets provides prepaid-duty shipping labels, customs documentation, and access to supported international carriers.

Merchant-of-record benefits apply only to orders shipped with Managed Markets labels.Learn more about the division of responsibilities in Shopify’s Managed Markets overview.

When Managed Markets fits

Managed Markets is for eligible Shopify businesses that want Shopify and Global-e to manage key parts of international selling. 

Consider Managed Markets in the case of:

• International expansion: The business is entering or testing several supported markets.
• Landed-cost management: Duties and import taxes must be calculated and collected at checkout.
• Checkout localization: International customers expect local currencies and payment methods.
• Risk management: Fraud and chargebacks are creating additional exposure on US international orders.
• Supported fulfillment: The business can use Managed Markets labels and participating carriers.

Before activation, confirm that Shopify supports each target market, product category, and fulfillment method. The Managed Markets eligibility requirements show the current restrictions.