Merchant of record

The merchant of record is whoever the customer legally buys from. That entity is responsible for charging and remitting sales tax or VAT, handling chargebacks, meeting payment-card compliance obligations, and appearing on the customer’s statement.

There are two models:

• You are the merchant of record. You own the customer relationship and the revenue, and you carry the tax registration and compliance burden in every jurisdiction where you sell.
• A third party is the merchant of record. A reseller platform sells to the end customer and pays you. They absorb tax and compliance complexity; you give up margin, some pricing control, and direct ownership of the customer relationship.

Why B2B SaaS usually stays merchant of record

MoR services are popular with consumer and prosumer products selling small amounts into many countries, where per-jurisdiction tax registration would be prohibitive.

B2B SaaS selling negotiated contracts usually keeps the merchant relationship, because the deals are large, the buyer expects to contract directly with the vendor, and B2B cross-border sales frequently shift the VAT obligation to the buyer under reverse charge — which removes much of the burden an MoR exists to absorb.

Multiple entities is the related pattern

Companies expanding internationally more often establish their own local legal entities than adopt an MoR: a US entity invoicing US customers, an EU entity invoicing in euros, an Australian entity for APAC. Each is its own merchant of record with its own tax registrations and its own accounting integration, while ideally sharing one product catalog so pricing does not fragment across entities.