Not All Merchant of Record Services Are Created Equal
We recently spoke with a game publisher that learned a hard lesson about Merchant of Record (MoR) services. Like many teams, they were optimizing DTC operating costs.
A provider offered attractive pricing and advertised global MoR coverage. On the surface, it checked every box. Payments, tax handling, compliance support, fraud controls, refunds, chargebacks…
The publisher moved forward.
Months later, they found that their idea of global MoR and the provider's idea were not the same. In some territories, the provider acted as the Merchant of Record. In others, the publisher still owned tax registration, filings, and compliance. Those responsibilities were not hidden. They sat in contract detail that neither the business team nor legal had fully weighed during procurement. The difference became clear once transactions were live.
The project was small and the exposure was limited. But it raised the question every studio should ask earlier. When a provider claims to offer MoR services, what exactly are they responsible for?
Why “MoR” is not a single product
Studios often assume Merchant of Record means full ownership of tax, regulatory compliance, transaction operations, fraud, refunds, and every customer facing financial obligation. In reality, the answer depends entirely on the provider.
Some run a more integrated model and assume defined tax, compliance, refund, fraud, and transaction responsibilities across supported markets. Others cover only select regions and leave the publisher to handle compliance directly or hire third party consultants elsewhere.
Neither model is wrong. The problem starts when a publisher buys one model but ends up receiving the other.
Why this matters specifically for games
Many providers came from ecommerce, not games. Their compliance, operations, and coverage were built for traditional online retail and extended into games later. So a provider can legitimately offer MoR services while still expecting the studio to manage parts of tax compliance, regional registration, or regulatory requirements.
The publisher believes they have compliance protection. The provider believes they delivered exactly what was promised. The gap between those two beliefs rarely shows up until months later.
There is another game specific layer on top of this. A mobile game sells virtual currency, bundles, subscriptions, limited time offers, and other digital items to players across borders. Each carries its own refund patterns, platform rules, age and payment controls, fraud risks, and local tax treatment. MoR coverage has to support the way the game actually monetizes, not sit apart from the product and liveops model.
In a game hub, MoR coverage is part of the player experience. It affects which offers can go live, how receipts and refunds are handled, how local purchase rules are supported, and whether the studio can scale campaigns across markets without adding hidden operational burden.
Markets that require extra attention
In the EU and UK, studios need clarity on VAT treatment, invoicing, consumer location rules, and digital goods classification. In the US, sales tax exposure varies by state, which makes “US coverage” too broad to accept without detail.
Brazil and India turn operationally heavy the moment local tax, registration, or filing stays with the publisher.
Japan and South Korea deserve separate review around digital commerce, receipts, refunds, and local compliance handling.
Canada and Australia can look simpler, but GST, HST/PST, and receipt obligations still need explicit confirmation.
The MoR evaluation checklist
The type of product you have changes what you need, so verify coverage against the way the game actually monetizes. Before selecting a provider, a publisher should get clear answers to a few questions:
- In which countries do tax obligations remain with the publisher?
- Are local regulatory obligations included?
- Are refunds and chargebacks handled by the MoR for all end users?
- What liabilities remain with the publisher?
- Which services require third party consultants?
Then confirm every answer in the contract itself, not in the conversation.
Conclusion
Merchant of Record is not a standardized product. Two providers can use the same term and deliver very different levels of responsibility, protection, and operational support.
For game studios, the question is not only whether MoR coverage exists. It is whether that coverage supports the way the game actually monetizes.
At Aghanim, MoR coverage is treated as part of the studio’s DTC architecture, not as a generic payments feature. It is mapped against launch markets, game economy design, liveops cadence, refund patterns, offer types, and the way players actually buy inside the game hub before anything goes live.
