Merchant of Record?
Merchant of Record is a term used in e-commerce and payment processing to refer to the entity that is responsible for processing and handling customer transactions. The Merchant of Record is typically the party that is authorized to accept payments from customers, process those payments, and handle any associated financial transactions. This entity can be a company, a business, or an individual that is responsible for ensuring that payments are processed securely and accurately.
Technically MoR isn't a proper legal term and you might still be liable for things as a true seller. However, it simplifies your invoicing and takes care about international taxes. Just remember that some services claiming to be merchants of record only handle taxes in certain economic areas (like the US and EU). Since I am from the EU, that's what I care about the most.
Paddle and Stripe
Business Class basically started as a way for me to get billing with a Merchant of Record. At the time the best bet was Paddle whose offering is now called Paddle Billing. It's the sole and only reason why Business Class officially supports two payment providers. (Side note: Pay gem supports also other providers but I retest and correct the 1:1 mapping of provider states for the ones I support.)
I started my little book business because I found out about Gumroad and realiazed I can actually self-publish something. I wouldn't honestly started if I wasn't sure about how I deal with taxes. And yes, there is plenty of discussion online about needing to care about tax at the beginning at all. But hey, I live in Europe and I am registered to VAT, so I am not winging it.
So I started with Paddle for MoR and added support for Stripe later based on popularity.
Stripe MoR
Things are changing fast. Not only I have seen some new providers coming out, the merger of Lemon Squeezy now brought Stripe Managed Payments that will handle your international tax compliance, fraud and disputes. So far we don't know every detail but it seems like one time purchases won't be supported alongside few other things.
Still, Stripe MoR offer can change the status quo a little bit. It made me think if Business Class 3.0 should focus solely on Stripe and perhaps do a bit more with it given the time saving from testing Paddle. The reason being that even if I use Paddle now with Business Class 2.0, we need to look into the future.
The downside of removing Paddle won't be losing the MoR offer but the option of a second provider. And you never know if you won't get approve and grow in disappointment and need to switch… In that sense the current template is safer option as you can not only start with 2 providers but you can even switch down the line.
