Core concepts

Merchant of record

A Merxian account works in one of two business models. In the payments model, you are the seller. In the merchant of record model, Merxian is the seller to your buyers.

On this page

What merchant of record means
The three parties
Compare the two models
What Merxian does as the seller
What stays with you
What the model means for your integration
Disputes and chargebacks

What merchant of record means#

The merchant of record is the business that sells to the buyer. It is the seller on the invoice, and it is responsible for the tax on the sale.

When Merxian is the merchant of record, the buyer buys from Merxian. Merxian sells your product under the name that you give it in your catalog. You receive the proceeds of the sale, after VAT and the Merxian fee.

The three parties#

Party	Role in the merchant of record model
Your business	Owns the product, sets the prices in the catalog, and delivers the product to the buyer. Receives the proceeds.
Merxian	Sells to the buyer. Processes the payment, calculates VAT, issues the invoice in its own name, and prepares the tax return. Pays out the proceeds to you.
Buyer	Buys from Merxian on the hosted checkout page, pays the price with the VAT of their country, and receives an invoice from Merxian.

The flow of one sale:

The buyer checks out. The page shows the total with the VAT for the buyer’s country.
Merxian collects the payment and records the sale, with the tax rate and the evidence of the buyer’s location.
Merxian issues the invoice in its own name. The invoice lines name your product.
The sale amount, less VAT and the Merxian fee, is scheduled for payout to you.

Compare the two models#

Both models use the same API, the same hosted checkout, the same webhooks, and the same payouts. The difference is who sells and who does the tax and invoice work.

Subject	Payments model	Merchant of record model
Seller to the buyer	Your business	Merxian
Payment processing	Merxian	Merxian
VAT calculation	You. Merxian calculates no tax.	Merxian, for each line, from the buyer’s location
Buyer invoice	You issue it	Merxian issues it in its own name
Tax return for the sales	You	Merxian prepares the One-Stop Shop return
Refunds	You request them through the API	You request them through the API. Merxian issues the credit note.
Proceeds	Paid out to you, less the Merxian fee	Paid out to you, less VAT and the Merxian fee

A new account starts in the payments model.

What Merxian does as the seller#

In the merchant of record model, Merxian does this work for each sale:

Tax. Merxian calculates the VAT from the buyer’s country, the product, and a valid business VAT ID. It keeps the evidence of the buyer’s location with the sale. See Tax.
Invoices. Merxian issues a numbered invoice for each paid sale and a credit note for each refund or correction. See Invoices.
Returns. Merxian totals qualifying sales by country and prepares the One-Stop Shop return. Filing the return is a separate step.

What stays with you#

Merchant of record changes who sells and who does the stated tax and invoice work. It does not move every duty of your business to Merxian.

You own your product and its description, and you deliver it to the buyer. Merxian does not deliver products and does not ship physical goods.
You set your prices, and you say for each price whether it includes tax.
You decide when to refund, and you request the refund through the API.
Your own business obligations stay with you, for example the tax on your own income and the terms that you give your buyers.

What the model means for your integration#

The integration is the same in both models. You create transactions, send buyers to checkout, and receive webhook events.
In the merchant of record model, a transaction needs catalog lines. A transaction with only an amount returns 422 with the code amount_only_not_allowed. See Products and prices.
Tax needs the buyer’s country, and an invoice needs a billing address. Checkout collects both on the hosted page.
Each transaction keeps the model that applied when it was created and finalized. A later change to the model of your account does not change existing transactions.
The invoice.issued and invoice.credited events report the documents that Merxian issues.

Disputes and chargebacks#

The payer’s bank can dispute a payment in both models. You pay every chargeback in both models. See Fees and Disputes.