Who shows up on the guest’s credit card or bank statement?

The Merchant of Record’s descriptor (e.g., “Lake.com”) appears because the MoR is the legal seller of the transaction for payments purposes and carries the risk and compliance obligations tied to that charge.

How is a Merchant of Record different from a PSP or payment gateway?

A payment service provider (PSP) or gateway (e.g., entities that route transactions to Visa, Mastercard, American Express) is a technology and connectivity layer. The MoR is the legal merchant assuming financial and regulatory responsibility, including tax and chargeback handling.

Does the MoR handle taxes like VAT/GST or state lodging tax?

Typically yes. The MoR determines tax treatment based on the booking location and product, calculates applicable VAT/GST or sales/lodging taxes, and remits them where required. Exact scope varies by jurisdiction and contract.

Who manages refunds, disputes, and chargebacks?

The MoR receives and processes refunds and chargebacks under card-network rules and platform policies, coordinating with the host and guest as needed and providing evidence to the issuing bank when disputes arise.

How do Strong Customer Authentication (SCA) and PCI DSS apply?

The MoR ensures payments are authenticated as required (e.g., PSD2/SCA in the EEA) and that card data is handled under PCI DSS. This reduces the compliance burden on individual hosts.

What about cross-border bookings and currency conversion?

For international guests, the MoR can present local payment methods (e.g., Apple Pay, Google Pay) and process in the guest’s or platform currency, handling FX conversion and settlement to the host per payout terms.

Merchant of Record (MOR)

210 0 0 September 11, 2025

Definition: What Is a Merchant of Record?

The Merchant of Record (MoR) is the legal entity that accepts the guest’s payment and bears the responsibilities that come with it—appearing on the statement, managing refunds and chargebacks, calculating and remitting applicable taxes (e.g., VAT/GST or lodging tax), and complying with card-network and regulatory requirements (PCI DSS, PSD2/SCA, KYC/AML). In card payments, the MoR interacts—directly or via a PSP/gateway—with networks like Visa, Mastercard, and American Express to authorize and capture funds.

On Lake.com, Lake.com is the Merchant of Record on all transactions. That means we handle the payment lifecycle end-to-end, so hosts can concentrate on operations and guest experience.

What the MoR Is Responsible For

Accepting payment: Presenting supported methods (cards, Apple Pay, Google Pay, local options) and authorizing funds securely.
Compliance & risk: PCI DSS card-data security; Strong Customer Authentication where applicable; KYC/AML controls for payouts and fraud prevention.
Taxes: Determining tax nexus and rules; calculating and remitting VAT/GST or sales/lodging tax when required by law or platform policy.
Refunds & disputes: Executing cancellations/refunds per policy; contesting chargebacks with issuers; maintaining card-network standing.
Settlement: Holding funds and paying out to the host according to the agreed schedule and currency terms.

MoR vs. PSP vs. Gateway vs. SoR

Merchant of Record (MoR): Legal merchant on the transaction; appears on the statement; assumes financial and regulatory responsibility.
Payment Service Provider (PSP): Technical processor that routes payments and provides risk tools and reporting.
Payment Gateway: Connectivity layer that securely transmits payment data to the processor/acquirer.
Seller of Record (SoR): The entity legally selling the underlying service. In lodging, the host is often the SoR for accommodation, while the platform serves as MoR for payments.

How It Works (Typical Flow)

Authorization: Guest confirms booking → MoR requests card authorization via PSP/gateway → card network → issuing bank.
Capture & tax: On policy-defined timing, MoR captures funds, calculates applicable taxes, and records the transaction.
Payout: MoR settles net proceeds to the host’s bank account per payout currency/schedule and handles any subsequent adjustments (refunds/chargebacks).

Why It Matters to Hosts & Guests

For hosts: Offloads complex, evolving obligations (PCI, SCA, tax, disputes), provides unified reporting, and accelerates time-to-market.
For guests: Recognizable statement descriptor, local payment choices, consistent refund handling, and strong security standards.

Examples

Standard booking: A guest books a waterfront cabin. The statement shows “Lake.com”; MoR calculates state lodging tax and remits it; net payout is sent to the host.
Cross-border stay: A traveler from the EU books in Canada. The MoR applies PSD2/SCA during checkout, handles FX conversion, and pays the host in their selected currency.
Dispute case: A no-show results in a chargeback. The MoR assembles evidence (policy, logs, messages) and submits it to the issuer under card-network rules.

Related Terms

Frequently Asked Questions

Will the guest see my property or Lake.com on their statement?

They will see the Merchant of Record’s descriptor (e.g., “Lake.com”). The booking details and receipt still reference your property and stay information.

Who is liable for card-network compliance (e.g., PCI DSS)?

The MoR owns PCI DSS responsibility for the platform’s payment flow. Hosts should still follow good security practices but do not handle raw card data when booking through Lake.com.

How are refunds timed and communicated?

The MoR issues refunds per the cancellation policy and card-network rails. Guests receive a confirmation email; hosts see the refund and payout adjustment in their dashboard.

What if a guest disputes a charge?

The MoR manages the chargeback process end-to-end—collecting evidence (messages, check-in logs, policy) and responding to the issuing bank under Visa/Mastercard/Amex rules.

Does the MoR withhold or remit lodging or sales taxes?

Where required or configured, yes. The MoR calculates, withholds, and remits applicable transactional taxes, and surfaces reporting so hosts can reconcile their obligations.

How do multi-currency payouts work?

The MoR can collect in the guest’s or platform currency and remit to hosts in their selected payout currency, applying FX conversion at the time specified by payout policy.

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