Bag DocsFinance
What is a Merchant of Record?
How Bag acts as your legal reseller, not just a payment gateway.
What is a Merchant of Record?
A Merchant of Record (MoR) is the legal entity that sells goods or services to the end customer. Unlike a payment gateway that simply moves money, a MoR owns the transaction itself — appearing as the seller on receipts, handling tax obligations, and absorbing compliance liability.
How Bag Works as Your MoR
When you use Bag:
- Bag appears as the seller on every receipt and invoice
- We absorb tax, compliance, and liability across all supported jurisdictions
- Crypto never touches your accounting books or corporate bank account
- You receive clean fiat or stablecoin payouts with consolidated settlement invoices
Your customers pay Bag. Bag pays you. The regulatory complexity sits with us.
MoR vs Payment Gateway
| Feature | Bag (MoR) | Standard Payment Gateway |
|---|---|---|
| Legal seller | Bag | Your company |
| Tax collection & remittance | Handled by Bag | You are responsible |
| Compliance & regulatory burden | Bag assumes liability | You handle local laws and chargebacks |
| Financial reporting | Consolidated settlement invoice | Direct transaction records |
| Risk management | KYT/AML tools integrated | You configure your own |
| Payout options | Fiat or stablecoins | Fiat only (requires bank setup) |
| Chargeback liability | Absorbed by Bag | You handle disputes |
Key takeaway: When Bag is the MoR, all VAT/GST obligations, chargeback liability, and local compliance requirements transfer to us — not you. This lets you scale your product, not your finance team.
Who Benefits Most
- Startups — Skip months of tax registration and compliance setup
- Global sellers — Sell to 100+ countries without local entities
- Crypto-native products — Accept USDC without becoming a money transmitter
- SaaS companies — Recurring billing with automatic tax handling