As e-commerce continues its rapid global expansion, particularly across Latin America, one of the biggest roadblocks for brands looking to scale internationally is payments, tax compliance, and legal responsibility in new markets. These challenges are especially acute in cross-border commerce, where different regulations, currencies, and tax systems make managing international transactions resource-intensive and complex.
One strategic model that helps brands overcome these hurdles is the Merchant of Record (MoR). Understanding and leveraging this model can reduce operational burden, improve compliance, and accelerate market entry—making it a compelling growth enabler for ambitious brands in 2026 and beyond.
What Is a Merchant of Record?
A Merchant of Record (MoR) is the legal entity responsible for processing customer payments and managing all associated financial liabilities in an e-commerce transaction. This includes handling payment processing, tax collection and remittance, regulatory compliance, refunds, and chargebacks. In essence, the MoR legally sells goods or services to the end customer on behalf of the brand.
When a brand partners with an MoR provider, it outsources the legal and financial aspects of global sales. Customers still interact with the brand’s storefront and experience, but the MoR appears as the seller on bank statements and assumes responsibility for compliance with local requirements in each jurisdiction.
Why Partner with a Merchant of Record?
Selling internationally introduces layers of complexity that can slow growth:
- Different tax regimes and VAT/sales tax rules
- Local reconciliation and reporting requirements
- Multiple payment methods and currency conversions
- High liability for refunds and disputes
By partnering with a third-party MoR, brands can simplify these complexities and focus on growth instead of operational overhead.
- Simplified International Payments
- Compliance with Global Taxes and Regulations
- Reduced Administrative Burden
- Faster Time to Market
Managing payments in multiple countries means adapting to local payment preferences and compliance standards. An external MoR handles this, absorbing the liability and ensuring that payment processing meets technical and legal requirements. This helps brands avoid costly mistakes and delays that can arise when building in-house international payment infrastructure.
Tax compliance is one of the most resource-intensive aspects of global e-commerce. Each country has its own rules for sales tax, VAT, or consumption tax, and staying compliant requires dedicated expertise. MoR partners monitor and handle tax collection, remittance, and reporting across jurisdictions—reducing legal risk for the brand.
Processing refunds, managing chargebacks, and resolving disputes are all part of the legal responsibilities MoRs handle on behalf of the brand. This significantly reduces back-office workload and allows internal teams to focus on core priorities such as customer experience, marketing, and product development.
Expanding into new regions often requires setting up local entities, securing tax IDs, establishing banking relationships, and building localized checkout experiences. These steps can take months or even years. A Merchant of Record can accelerate market entry by streamlining these processes through existing infrastructure and compliance systems, allowing brands to launch faster.
MoR vs. Traditional Payment Solutions
A common question brands face is whether to rely on payment service providers (PSPs) or integrate a Merchant of Record. While PSPs handle transaction processing and connectivity with payment networks, they do not take on legal liability for compliance, tax remittance, and refunds—all of which are core responsibilities of an MoR.
This distinction is critical: PSPs facilitate payments, but MoRs own the transaction legally and absorb the associated risks. This makes MoRs particularly valuable for brands entering foreign markets without local entities.
Is MoR Right for Every Business?
Not every business will need a Merchant of Record. Brands with strong internal infrastructure and legal teams capable of managing tax compliance and payments may choose to retain control. However, for businesses seeking agility and rapid expansion without building global compliance systems from scratch, partnering with an MoR can be a strategic advantage.
MoR as Part of a Full Cross-Border Strategy
In the context of cross-border e-commerce, payments and financial compliance cannot be siloed from logistics, customer service, and order management. An end-to-end approach that integrates payment operations with fulfillment, returns, and data flows makes global expansion more seamless.
At Kiki Latam, services are designed to support these integrated operational needs. From cross-border logistics to payment handling and reconciliation, Kiki helps brands manage the full supply chain and financial stack needed for effective international growth. Explore all offerings here:
Accelerating Growth with Expert Support
If your brand is considering international expansion but is weighed down by the complexity of multi-jurisdiction compliance and payment operations, it may be time to explore how a Merchant of Record model can accelerate your strategy.
Speak with an expert to evaluate whether MoR or an integrated global commerce solution is right for your business:
👉 Contact a Kiki Latam expert!
Expanding globally shouldn’t be slowed by technical and regulatory barriers. With the right partners and strategy, you can focus on what matters most: building customer loyalty and capturing new markets.