Diana Vorniceanu, Senior Editor at The Paypers, discusses the role Merchant of Record solutions in global ecommerce.
For merchants and SaaS companies, embracing global ecommerce is not just an option but rather the path forward to remaining relevant and staying ahead of the competition. When looking from afar, it seems that the process of entering new markets and selling across borders has never been easier to achieve. In recent years, customer behaviour shifted towards embracing online shopping, while payments and logistics infrastructures have undergone several developments aimed at making cross-border ecommerce more efficient.
However, in practice, the promise of borderless ecommerce collides with the reality of a fragmented regulatory, payment, and tax landscape. While merchants and SaaS companies race to capture the projected USD 6.8 trillion ecommerce market volume, they face a complex web of localised payment preferences and both local and global compliance barriers, which make expanding into new markets an operational challenge.
These complexities are further emphasised by regulatory environments, especially considering tax policy changes, geopolitical developments, and retaliatory tariff measures, as well as the growing importance of offering localised payment methods. This dynamic environment has influenced an increased adoption of Merchant of Record (MoR) services. MoR providers act like buffers against policy volatility by responding and adapting to regulatory updates without requiring action from the merchant side, all to ensure compliance across multiple jurisdictions.
In 2024 alone, the MoR market size reached an estimated USD 11.61 billion. The figure is expected to increase to USD 13.20 billion in 2025, at a CAGR of 14.59%, and to USD 26.29 billion by 2030. While software and SaaS companies are a particularly rising user base for MoR solutions, ecommerce merchants represent a complex yet growing segment. However, the value proposition in this case can differ. SaaS and software businesses leverage MoR providers for payment and compliance efficiencies – as do other small to medium-sized ecommerce businesses. Some larger physical goods merchants with internal payments and compliance capabilities often use MoR solutions to gain access to new markets faster, especially when they want to test a region without making a significant upfront investment. In this case, leveraging a MoR becomes part of a strategy centred around resource allocation, at a time when time-to-market is a critical competitive factor.
MoR solutions as an alternative to localised DIY payment setups
In 2026, businesses no longer question whether geographical expansion requires an advanced compliance and payments infrastructure; instead, the question is when and where they should build or outsource it. In this scenario, the MoR model represents the second option. In practice, a MoR partner addresses the central challenge of cross-border selling. It helps businesses tap new markets without having to allocate time and resources to building internal teams to handle payment, tax, and regulatory compliance complexities across multiple jurisdictions.
As a business partner, the MoR acts like the legal entity that sells the product on behalf of the merchant or SaaS company. It handles everything, from the payment transaction itself to related liabilities – taxes, PCI, and local consumer law compliance – as well as managing refunds and chargebacks. Unlike a payment service provider (PSP), which solely handles payment processing, in this scenario, the MoR assumes full legal and tax liability. This includes responsibility for payment disputes, tax audits, and potential regulatory violations, all of which can lead to significant financial losses and operational and reputational damages. As part of their service model, MoRs handle all these risks.
Apart from ensuring cross-border compliance, using a MoR solution gives companies access to its global payment network. One of the biggest challenges when expanding to a new country is the ability to offer popular payment methods familiar to local buyers. As statistics show, customers are more likely to abandon a purchase if their preferred payment method is not available – and payment preferences vary significantly across geographies. Without a partner responsible for the full payment integration aspect of an expansion, a business must deal not only with the varying tax and consumer protection obligations but also with finding the right partners to offer the right payment options in each geography.
Despite these advantages, on a per-transaction basis, using a MoR partner does imply a higher cost for merchants. However, the discussion about whether this is more expensive than scaling one’s compliance and payments stack depends on the business’s size, resources, and market reach.
Looking ahead
In 2025, the collapse of Digital River, one of the first companies to popularise the MoR model, shook the payments industry and exposed several fundamental flaws in the traditional MoR model, stemming from its one-size-fits-all design. However, even before Digital River’s fall, the ecosystem started to evolve towards modular, merchant-centric solutions, often specialised by vertical or geography. In the future, these are expected to offer businesses more control and flexibility, making them a more suitable alternative for today’s merchants and SaaS companies that want to go global.
This editorial piece was first published in The Paypers' Global Ecommerce Report 2026, which provides a complete overview of key trends and strategies to help businesses worldwide succeed. Download your free copy today to explore in-depth insights on global ecommerce trends, the latest innovations in payment solutions, and strategies to stay ahead in a competitive market.
About the author
Diana Vorniceanu (Lupuleac) is a Senior Editor at The Paypers. She has an extensive background in content creation and is a graduate of Foreign Languages and Literature studies, currently specialising in payments and ecommerce. She strives to bring forward the latest trends for our readers, while investigating the ever-evolving landscape of cross-border payments, global ecommerce, payments for marketplaces and online platforms, and emerging technologies across the globe. You can reach Diana via email at diana@thepaypers.com or on LinkedIn.
