Choosing a provider
Merchant of Record vs Merchant Account: Which Is Right After Stripe?
After a Stripe shutdown, you’ll hear two very different suggestions: “just use Paddle” and “get a proper merchant account.” They solve different problems.
The difference in one sentence
With a merchant of record (MoR), the platform legally sells your product to the customer and pays you. With a merchant account, you are the seller, and the processor just moves the money.
Side by side
| Merchant of record | Merchant account | |
|---|---|---|
| Who’s the seller | The MoR | You |
| Sales tax / VAT | Handled for you | Your responsibility |
| Typical fees | Higher (often 5%+ plus a fixed fee) | Lower at volume, varies by risk |
| Checkout control | Limited | Full |
| Disputes | Mostly handled by the MoR | Yours to manage |
| Setup speed | Fast | Slower, with real underwriting |
| Category flexibility | Their acceptable-use policy | Depends on the processor; specialists accept more |
When an MoR wins
- You’re small and selling globally to consumers
- You don’t want to register for VAT and sales tax in many places
- Your product is clearly within their policies
When a merchant account wins
- You have steady volume and fees start to matter
- You want control over checkout, billing logic and customer data
- Your category is one MoRs decline or restrict
- You need stability more than speed
Don’t forget
An MoR also reviews you, and can also close your account. Whichever route you take, make sure it’s based on an honest description of your business, and keep a backup processor.