Who the merchant of record can be
- You: sales go through your own payment account, and tax and compliance are yours to handle
- An app store: for purchases made through store billing, the store is the seller and remits tax in most countries
- A reseller service: a company that sells on your behalf, handles tax worldwide and pays you the remainder for a fee
- A platform vendor: some streaming platforms act as the seller and pay out to the content owner
Why it matters
Digital services are taxed where the customer is, so a service selling in fifty countries may owe tax in many of them. Whoever is merchant of record carries that duty, along with fraud liability and chargebacks.
It also decides who holds the customer relationship. When you are the merchant of record, the payment accounts, the customer data and the stored payment tokens are yours, and they move with you if you change platform.
The trade-off
Using a third party as merchant of record removes most tax and compliance work and usually costs more per sale. Being your own costs less per sale and requires you, or your advisers and tools, to register and file where you owe tax.
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