The merchant of record, or MoR, is the entity that legally sells to the cardholder: its name is on the billing descriptor, it owes the taxes, it carries the refund and chargeback liability, and it is the merchant the card networks and acquirer recognize. A business can be its own MoR or sell through a third party MoR that resells its products and handles payments, taxes and compliance.
Why it matters
For high risk businesses the MoR question is really a control question. Using a third party MoR outsources the processing relationship, attractive when your vertical struggles to get accounts, but the MoR’s risk appetite becomes your ceiling: its content rules, its reserve, its right to drop your products apply to you wholesale, and card network rules restrict what an MoR may resell in registered categories. Being your own MoR costs more effort, underwriting, tax registrations, compliance, and returns more durability. Merchants who treat an MoR as a permanent home rather than a bridge tend to relearn the payment facilitator lesson at a worse moment.