Payrails launches a hybrid Merchant of Record that runs alongside a merchant's own acquiring

Berlin-based orchestration vendor Payrails launched a Merchant of Record product that a company can run market by market next to its own direct acquiring on the same platform. In each market assigned to the MoR, Payrails becomes the legal seller and handles sales tax, VAT and GST calculation and remittance, invoicing, compliance, fraud prevention and disputes.

A feature the company calls graduation moves a market off the MoR onto the merchant's own merchant IDs without re-integration, and saved credentials sit in a provider-independent token vault so returning customers are not asked for card details again when a market moves. The target buyers are AI, SaaS, mobile app and digital goods companies selling cross-border; Preply, DeepL and Eneba are named as existing orchestration customers.

Merchant of Record is normally an all-or-nothing choice that hands the provider the seller relationship, the saved cards and the routing, and MoR fees typically run around 5% plus a per-transaction charge. Letting a merchant hold MoR coverage in the markets where compliance is not worth building and direct acquiring where volume justifies it attacks the lock-in rather than the pricing, and it puts a European orchestration vendor into a segment dominated by US merchant-of-record platforms.

Which markets the MoR actually covers, since the launch material names none, and whether any merchant uses graduation to move a market onto its own merchant IDs in practice.

• thepaypers.com