Legal & financial term
Merchant of Record (MoR)
When a Merchant of Record (Paddle, Lemon Squeezy, FastSpring) processes the sale, they become the legal seller. They handle global sales tax registration, VAT reporting, currency conversion, fraud, and refunds. The product founder receives a payout net of fees. The trade-off: the MoR takes a higher cut than Stripe direct (typically 5-7% vs Stripe's 2.9% + 30¢), but the founder offloads a meaningful operational burden.
Verified · editorial policy
How to operationalize this
Decide MoR vs direct based on three questions: (1) Do you sell internationally with VAT obligations? (2) Do you want to be in the sales-tax compliance business? (3) Is your average transaction size large enough that the MoR fee delta hurts? MoR wins on (1) and (2); direct wins on (3) above ~$200/month average.
Common misuse
Founders treat 'MoR vs not' as a payment-processor decision. It is a legal-entity decision. Switching from Stripe direct to a MoR (or back) is a real operational migration, not a flag flip.
What “good” looks like for indie SaaS
Sub-$200/month average revenue per customer + significant international traffic → MoR makes sense. Above $200/month with US-primary customers → Stripe direct usually wins on economics. Either choice is defensible; the wrong choice is making it casually.
Frequently asked
- Can I switch from Stripe to a MoR later?
- Yes, but it requires migrating customers from your Stripe account to the MoR-managed Stripe relationship. Usually involves customer notification and re-authorization. Plan for 2-4 weeks of operational lift.
Apply the term to a live page
The free 90-second Launch Diagnostic labels which Brunson failure mode your page hits — many of these terms have direct connections to the diagnosis.