What is the difference between a merchant of record and a payment facilitator?

A payment facilitator signs merchant agreements on behalf of an acquirer and settles funds to sub-merchants, which stay the sellers of record. A merchant of record is itself the seller: it resells the product under its own name and owes the taxes and the disputes.

What a payment facilitator is

A PayFac signs merchant agreements on behalf of an acquirer and receives settlement for its sub-merchants. The sub-merchant stays the MoR: its name is on the descriptor, it owes its own taxes, and the dispute is about its sale. The PayFac carries the financial liability toward the acquirer, which is a different thing.

What a merchant of record provider is

An MoR provider buys the product from the vendor in the moment of the sale and resells it to the buyer under its own name, so it collects VAT and sales tax worldwide, runs refunds and disputes, and pays the vendor a net amount. The line matters: in a 2025 case, the FTC took the view that a provider calling itself a merchant of record should have registered with the card networks as a payment facilitator, since its clients set the price and the refund terms.

More detail in our #PayDecoding episode on Merchant of record.