Merchant of record vs seller of record: how to choose

Two words that get used loosely. They describe a legal position, not a feature.

The seller of record is whoever is legally selling to the customer. Their name is on the charge and the invoice, they owe the tax on the sale, they carry the chargeback risk, and they own the customer relationship.

A merchant of record is a platform that takes that position from you. You supply the product to the platform; the platform sells it onward to your customer. Because it is now the seller, it takes on the tax registration and remittance, and it pays you out on its own schedule.

Neither is a trick. They are two coherent ways to run a software business, and the right one depends on which problem is actually hurting.

What actually changes. Every row here follows from the first.

	Merchant-of-record platforms	CANDI
Who is the seller	The platform. Their name is on the charge and the invoice.	You. Your name is on the charge.
Whose payment account	Theirs. Your customers pay them.	Yours. You connect your own account.
Where the money lands	With them, then paid out to you on their schedule.	In your account, on your own payout schedule. CANDI never holds it.
Sales tax / VAT	They calculate, collect and remit it.	Yours. CANDI does not calculate, collect, remit or file it.
Who verifies you	They do, as part of onboarding.	Your payment provider does. Not us.
Chargebacks	Theirs to fight, under their terms.	Yours, on your own account.

This is a structural comparison of the two billing models, not a claim about any one vendor. Business models change — check the vendor's own pricing and terms before you decide.

Which problem is the one hurting? Be honest about this rather than optimising the rate.

Choose a merchant of record when

You sell across borders and VAT/GST registration and filing is the thing eating your time or scaring you.
You have no finance function and no appetite to build one.
You would rather pay a higher effective rate than carry compliance risk.
You are fine with the platform's name on your customer's statement.

Stay the seller of record when

The customer relationship is the business, and you do not want a third party in it.
You want the money in your own account on your own payout schedule, not held and released.
You already handle tax, or you sell mostly in one jurisdiction where it is manageable.
Platform risk matters to you — an MoR offboarding you stops your revenue with it.

The mistake to avoid

Picking on headline rate. MoR rates bundle payment processing, tax compliance and payout into one number, so they are not comparable to a rate that bundles only some of those. Work out what each number actually covers before you compare them, and price your own tax work into the answer.

We are on the seller-of-record side. Which means we are the wrong tool for some of you.

Where CANDI actually is today. Live payments are not switched on yet, so nobody is taking live money through CANDI. Test mode is fully open — its own database, its own keys, the whole API, and Stripe onboarding, so you can connect a Stripe account and build the entire integration today. Stripe hosts the verification; CANDI never sees your identity documents.

CANDI is a billing layer for people who want to stay the seller. You connect your own payment account, the charge is yours, and we never hold your money. We add what a raw payment account lacks — checkout, subscriptions, licence keys, usage credits, discounts, affiliates, a customer portal and signed webhooks — behind one API.

We do not do tax. If the tax problem is why you are reading this, a merchant of record is your answer, and we would rather send you to one than sell you the wrong thing.

Answered plainly. Including the ones where the answer is no.

Is a merchant of record the same as a payment processor?

No. A processor moves the money but you remain the seller. A merchant of record replaces you as the seller, which is why it can take on your sales tax.

Who owes VAT if I use a merchant of record?

The merchant of record does, because it is the seller in that transaction. That is the core of what you are buying. If you stay the seller of record, the obligation stays with you.

Can I switch from an MoR back to being the seller later?

Yes, but it is real migration work: subscriptions, payment credentials and the customer relationship all sit with the MoR, and what you can take with you depends on their terms. Decide deliberately rather than defaulting.

Does CANDI make me the seller of record?

CANDI does not change your legal position — it assumes it. You sell through your own payment account, so you are the seller, and the tax obligation is yours.

Merchant of record vs seller of record It is presented as a billing decision. It is really a decision about who your customer is buying from, and it is hard to reverse once money is flowing.