What is a Merchant of Record (MoR)? And Why it is important for High Risk Merchants
- Andrea Ricci, CPA
- 6 days ago
- 4 min read
A Merchant of Record (MoR) is the legal entity that is considered the seller to the end customer—it’s the name that typically appears on the customer’s card/bank statement and it takes responsibility for the transaction, including handling refunds and chargebacks and other payment-related liabilities.
For online casinos, the MoR is the entity that “owns” the payment relationship with the player (even if another group company operates the gaming platform).
Merchant of Record vs PSP vs “Payment Agent” (quick clarity)
These terms get mixed up a lot:
MoR (Merchant of Record): Owns the sale and is liable for the transaction with the customer.
PSP (Payment Service Provider): Processes payments (gateway/acquirer/EMI/PI), but is not necessarily the seller.
Payment services “agent” (PSD2 context): An entity acting on behalf of an authorised payment institution (not the same thing as being the seller/MoR).
In practice, a casino group might use:
a Cyprus group company as MoR (seller on the statement), and
one or more PSPs/acquirers to execute card and bank payments.
Why online casinos use a group Merchant of Record structure
1) Better payment acceptance and “bankability”
Gambling is treated as high risk by many banks and acquirers. A dedicated MoR entity can be built with:
clean, audited financials,
dedicated compliance/chargeback operations,
clear policies and governance.
That can improve onboarding outcomes and reduce the odds of abrupt processing interruptions (though nothing eliminates risk entirely).
2) Centralized operations across brands and markets
If you run multiple casino brands (or multiple domains), one MoR can centralize:
payment routing (multiple acquirers),
reconciliation and reporting,
refunds, disputes, customer support workflows.
3) Chargeback and fraud control in one place
Because the MoR owns the player payment relationship, it can standardize:
descriptors and customer comms,
dispute evidence gathering,
fraud rules and velocity controls,
refund policies (which strongly affect chargebacks).
4) Risk ring-fencing
Separating “payments liability” (chargebacks, reserves, fraud losses) from the operating/gaming entity can help contain operational and legal exposure—while keeping gaming IP/operations stable.
Why Cyprus specifically can be attractive for a casino Merchant of Record
EU + euro area + SEPA rails
Cyprus is an EU Member State and a euro area country. That matters because euro-based payment flows can be simpler when your contracting entity is inside the EU/euro framework, and SEPA enables cashless euro payments across the EU (and beyond) in a standardized way.
“Single market” payment infrastructure
Where you contract, bank, and settle often influences which PSPs and banking partners will consider you. Cyprus is part of the EU payments landscape overseen under PSD2 transparency mechanisms (e.g., EBA registers for authorised entities).
Tax and structuring considerations (with an important 2026 update)
Historically Cyprus has been known for a comparatively low corporate tax rate, but reform proposals for 2026 profits include an increase from 12.5% to 15% (details depend on enacted legislation and effective dates). This doesn’t make Cyprus “bad” for structuring—but it means you should model the post-2026 reality rather than relying on older assumptions.
The key benefit for casinos: “clean contracting + clean flows”
A Cyprus MoR can help when it creates a clean, consistent story for counterparties:
Who sells to the player? → MoR
Who processes the payment? → PSP/acquirer/EMI
Who operates the games and holds the license? → Operator (may or may not be the same as MoR)
When those lines are documented—and matched by real operational substance—many PSPs find the setup easier to diligence.
Critical cautions (where casinos get burned)
MoR ≠ regulatory workaround
If the MoR is the seller to the player, it may trigger expectations around:
consumer terms,
complaints handling,
AML/KYC processes,
and—depending on jurisdictions—gaming regulatory requirements.
Many acquirers will require that the contracting entity aligns with the licensed operator model, or that the MoR is explicitly permitted in the licensing/contract chain.
“Shell MoR” is a fast track to account closure
If the Cyprus entity is only paper, acquirers may treat it as fronting/misrepresentation.
The MoR should typically have real substance, such as:
compliance staff or outsourced compliance function with oversight,
documented transaction monitoring and SAR escalation,
dispute/chargeback operations,
governance (board minutes, policies, audits).
Practical checklist: setting up a Cyprus Merchant of Record the “right” way
Contracts: Clear agreements between Operator ↔ MoR ↔ PSPs (who does KYC, who holds player funds, who is liable for refunds).
Player-facing terms: T&Cs, privacy policy, refund policy, and statement descriptor align with the MoR.
AML/KYC: Documented risk assessment, onboarding controls, monitoring, and reporting lines.
Chargeback program: Representment process, refund triggers, and customer support SLAs.
Substance: Real decision-making and ops (or properly governed outsourcing) in Cyprus.
Licensing alignment: Ensure the MoR model is consistent with gaming license obligations in target markets.
Bottom line
A Merchant of Record can be a powerful tool for online casinos—especially when used to centralize payments, improve processing stability, and professionalize compliance and dispute handling. Cyprus is often considered for MoR setups because it sits inside the EU/euro area ecosystem with SEPA connectivity and familiar commercial frameworks.
Ready to establish a Merchant of Record (MoR) structure that payment providers can actually onboard? Andrea Ricci, CPA supports online gaming and other regulated, high-risk sectors with end-to-end corporate and compliance services designed to improve acceptance rates and reduce operational friction.
Corporate services to help you launch a Merchant of Record
Entity formation & governance: jurisdiction selection, incorporation, registered office support, director/officer structuring, bylaws/resolutions, and group governance documentation.
MoR contracting & operational setup: intercompany agreements (operator ↔ MoR), processing flows, settlement design, reconciliation model, and policy alignment (refunds, disputes, customer comms).
AML/financial crime readiness: risk assessment, AML policy framework, KYC/KYB workflows, transaction monitoring oversight model, and documentation packages for PSP due diligence.
PSP/acquirer onboarding support: preparing compliance packs, business descriptions, flow-of-funds diagrams, chargeback strategy, and responses to underwriting questionnaires—aimed at securing a stable high risk merchant account.
Accounting & tax coordination: financial modeling, bookkeeping strategy, management reporting, transfer pricing coordination, and cross-border tax planning alignment with substance and permanent establishment considerations.
If you’re building a MoR in Cyprus (or another EU-friendly hub), Andrea Ricci, CPA can help you structure it the right way—from corporate foundation to PSP-ready documentation—so you can move faster, reduce rejection risk, and operate with confidence.
