Merchant of record (MoR)

In a classic online shop, you are the merchant of record yourself without thinking about it. The term becomes interesting in three situations: when you put an MoR service provider such as Paddle or Lemon Squeezy between yourself and the customer, when you sell via a marketplace, and since 2025 in agentic commerce, in which an AI agent completes the purchase for the customer.

This entry explains what the merchant of record is responsible for legally and technically, how it differs from the seller of record, payment service provider and marketplace, and why the major agentic commerce protocols expressly leave the retailer in this role.

What the merchant of record is responsible for

The role bundles everything that depends on a sale from the point of view of the customer and the authorities. Paddle, one of the best-known MoR service providers, sums it up in its definition: a merchant of record is "a legal entity responsible for selling goods or services to an end customer", manages all payments and takes on the associated liabilities, such as collecting VAT or sales taxes, PCI compliance and handling refunds and chargebacks.

For a retailer in Germany, this means in concrete terms that the merchant of record usually bears these obligations:

• The customer's contractual partner: the purchase contract is concluded between the customer and the MoR. Whoever appears on the order confirmation and the invoice is the contractual partner, not the operator of the checkout interface.
• Invoicing: under Section 14 of the German VAT Act (UStG), a business that supplies goods or services is entitled, and in certain cases obliged, to issue an invoice with the statutory mandatory information.
• VAT: the MoR owes the VAT on the sale and reports it. For cross-border sales to consumers, the EU distance selling rules and the One-Stop Shop procedure also apply.
• Withdrawal and warranty: notices of withdrawal, returns, subsequent performance and refunds are directed at the contractual partner. More on the deadline under withdrawal period.
• Mandatory information in the checkout: in electronic commerce with consumers, the business must design the ordering situation under Section 312j of the German Civil Code (BGB) in such a way that the customer expressly confirms that they are committing to a payment. A button must be clearly labelled with "order with obligation to pay" or a correspondingly unambiguous wording, otherwise the contract is not concluded.
• Payment risk: chargebacks, fraud cases and reversals end up with the merchant of record, because its name appears on the card statement and the card schemes list it as the merchant.

This entry does not replace legal or tax advice. Which obligations lie with the MoR and which with the product manufacturer in your specific constellation depends on the contract and the individual case and should be checked legally.

The origin in the card business

Historically, the merchant of record is the merchant that has an acquiring contract with a bank and accepts card payments under its own merchant ID. This explains the logic of liability: the card schemes only know this merchant. All reversals, fees and compliance requirements, such as PCI DSS, are directed at it. A payment service provider (PSP) takes over technical processing but does not act as the seller. The contract with the customer remains with the merchant.

Merchant of record, seller of record, PSP and marketplace compared

In everyday use, the terms are often mixed up. The following table classifies the four roles according to who is the customer's contractual partner, who owes the tax and who bears the payment risk. It is important to note that the merchant of record and the seller of record often coincide in practice, but do not have to.

Seller of record

The seller of record is the company that economically sells the goods or service and has usually also manufactured or purchased them. In a software provider's MoR model, the manufacturer is the seller of record, but the service provider is the merchant of record. The service provider formally buys the licence and resells it in its own name, often referred to as the "reseller model". The manufacturer receives a payout minus fees and only issues one invoice to the service provider, not to the many end customers.

Payment service provider

A PSP or payment facilitator such as Stripe, Mollie or Adyen provides the interface to card networks, wallets and banks. It collects the money and pays it out, but the merchant remains the seller, the issuer of invoices and the party liable for tax. If you integrate "Stripe" into your shop, you have therefore not commissioned a merchant of record but a payment service provider. Only the product Stripe Managed Payments, which builds on the Lemon Squeezy technology acquired in 2024, offers the MoR model.

Marketplace

A marketplace mediates. As a rule, the purchase contract is concluded between the buyer and the third-party seller, even if the marketplace takes over the checkout and often the payment. For tax purposes, the EU has made marketplaces the deemed supplier in certain constellations, such as imports from third countries, which means they owe the VAT for these sales. For domestic sales by a German retailer via a marketplace, the retailer normally remains the party liable for tax and the contractual partner.

MoR service providers for software and digital products

The MoR model is particularly widespread in the SaaS and software business, because the product there is digital and sold worldwide. Anyone selling an app or a plugin to customers in 40 countries would have to register for VAT in many jurisdictions, maintain tax rates, issue invoices in national formats and deal with chargebacks in foreign currencies. This is exactly the block that the MoR service provider takes off your hands.

Paddle

Paddle appears to the end customer as the seller. The customer buys from Paddle, Paddle issues the invoice, calculates and pays the tax and appears on the card statement. The software manufacturer receives periodic payouts. For buyers, this is sometimes confusing, because the bank statement shows the service provider rather than the product name. For the manufacturer, it considerably reduces the administrative effort.

Lemon Squeezy and Stripe

Lemon Squeezy was launched in 2021 and positions itself with the sentence "We're your merchant of record. That means we handle payments, merchant fees, fraud and sales tax". In July 2024, Stripe acquired the company; Stripe CEO Patrick Collison announced that MoR sales would be scaled "in a big way". The result is Stripe Managed Payments, with which Stripe also offers the MoR model alongside its pure PSP business.

App stores as merchant of record

Apple's App Store and Google Play also work on the MoR model for in-app purchases: the store is the customer's contractual partner, issues the invoice, pays the tax and pays the developer minus commission. This explains why developers do not write invoices to app users and why refunds go through the store. It also explains why the level of commission and the obligation to use the store checkout are so hotly contested.

Advantages and disadvantages of the MoR model

Whether you engage an MoR service provider is a trade-off between effort and control. The fees are typically higher than those of a pure payment service provider, because the MoR not only processes payments but also bears tax, invoices, risk and support.

• Advantage compliance: tax registrations, tax rates, invoice formats and reporting in many countries are no longer your concern.
• Advantage risk: chargebacks, fraud and PCI requirements shift to the service provider.
• Advantage speed: a global launch is possible in days instead of months.
• Disadvantage costs: the total fee is higher than the PSP fee plus your own accounting as soon as volume is large and the target markets are few.
• Disadvantage customer relationship: the customer formally buys from a third party. Invoices, reminders and bank statements show its name. Data and customer accounts are partly held by the service provider.
• Disadvantage dependency: pricing models, supported countries and product categories are determined by the service provider. Most software MoRs do not cover physical goods at all.

For a classic Shopware retailer with physical products and the DACH region as its main market, the MoR model rarely makes sense. For a plugin or SaaS provider with worldwide demand and a small team, it can be the only realistic solution.

The merchant of record in agentic commerce

With the emergence of AI agents that search for products and buy directly in the chat, the question has flared up again: who is the seller when the purchase is completed in ChatGPT or in Google's AI Mode? The two major protocols answer it in the same way: the retailer remains the merchant of record; the agent is merely an intermediary.

ACP: OpenAI and Stripe

The Agentic Commerce Protocol (ACP) was developed by Stripe and OpenAI and is open under the Apache 2.0 licence. The specification states: "With ACP, businesses maintain their customer relationships as the merchant of record, retaining control over which products can be sold, how they're presented, and how orders are fulfilled."

In the announcement of "Buy it in ChatGPT" on 29 September 2025, OpenAI describes the chatbot's role as "the user's AI agent", passing information between user and merchant "just like a digital personal shopper would". The first partners were Etsy sellers, followed by Shopify merchants.

UCP: Google and Shopify

On 11 January 2026, Google presented the Universal Commerce Protocol (UCP), developed jointly with Shopify, Etsy, Wayfair, Target and Walmart and supported by more than 20 other companies, including Adyen, Stripe, Mastercard, Visa and Zalando.

Here too, the retailer remains the merchant of record and keeps the customer relationship. In the Google Marketing Live update of May 2026, Google puts it unmistakably for checkout in AI Mode and Gemini: "Regardless of how a shopper chooses to buy, the retailer always remains the merchant of record."

What this means for retailers

The decision is favourable for retailers but brings obligations with it. If you remain the merchant of record, your terms and conditions, your withdrawal notice and your invoices also apply to purchases completed in the chat. You must therefore ensure that the agent passes on the mandatory information correctly to the customer and that an order confirmation with all the details reaches the customer.

The button solution from Section 312j BGB cannot be transferred one-to-one to a chat without a button; how courts will assess an agentic order is still open.

Technically, it means that your shop provides a product feed, a checkout interface and an order API that the protocol addresses. Payment runs via a token from the payment service provider, and the order is created in your system. For Shopware retailers, this means treating orders from agents like any other channel, with their own sales channel, their own invoice and their own returns handling.

A practical example

A manufacturer from Mönchengladbach sells a Shopware plugin as an annual licence and also physical hardware. For the licence, it uses an MoR service provider: the service provider is the contractual partner of buyers in 30 countries, issues the invoices, pays the VAT and handles refunds. The manufacturer receives a monthly statement and books only one business partner.

For the hardware, it remains the merchant of record itself in its own shop, with a PSP for payment. It issues the invoices under Section 14 UStG, bears the chargeback risk and processes withdrawals. When it opens the shop for agentic commerce, nothing changes: an order that a customer triggers via an AI agent also lands as an order in its Shopware, with its invoice and its withdrawal notice.

Frequently asked questions

Is a payment service provider such as Stripe or Mollie automatically the merchant of record?

No. A PSP processes payments; the merchant remains the seller, the issuer of invoices and the party liable for tax. Only special MoR products, such as Stripe Managed Payments or Paddle, take over the seller role.

Who issues the invoice if I sell via an MoR service provider?

The service provider issues the invoice to the end customer, because it is the contractual partner. You issue your invoice or credit note to the service provider, which pays you the proceeds minus fees. You clarify with your tax adviser how this is booked correctly for tax purposes.

Do I remain the merchant of record when an AI agent buys in ChatGPT or Google?

Yes. Both the Agentic Commerce Protocol from OpenAI and Stripe and the Universal Commerce Protocol from Google and Shopify stipulate that the retailer remains the merchant of record and keeps the customer relationship. The agent merely mediates.

Is an MoR service provider worthwhile for a German online shop with physical goods?

As a rule, no. Most MoR providers focus on digital products, and their fees are higher than those of a PSP. The model makes sense for selling digital products worldwide with a small team.

What is the difference between merchant of record and seller of record?

The merchant of record is the formal seller vis-à-vis the customer, the card schemes and the tax office. The seller of record is the economic seller of the goods. In your own shop, both are identical; in the MoR model, they diverge.