Merchant of Record for Gaming Companies [The How-To Guide]
Tags: gamedev, mor, saas, startup
Published: 2022-05-16 15:41:44

The years 2020 and 2021 brought about unprecedented growth in the videogames market. The world was forced to stay inside due to the pandemic, and people were looking for entertainment and social connections. Many found these in video games. With such a diverse range of video game consoles as well as the many mobile gaming options, there’s never been a better time for this industry. According to Statista.com, there were an estimated 3.24 billion gamers in the world in 2021, and the online gaming industry revenue reached $175.8 billion, gaining more and more customers.

![Merchant of Record for Gaming Companies](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/ng6sgvcx38tf8x2mphd2.png)

Since this market brings incredible opportunities for game developers, it would be extremely beneficial to learn more about how one can maximize sales and revenue, taking advantage of the amazing recent growth in this industry.

As you are likely aware, payment processing, billing and tax handling can be among the most complex parts of running your gaming business. With payment options expanding and payments becoming more complicated, you need a solution covering all your bases, helping you deal with all financial institutions while allowing you to focus on what matters most, your game. Let’s talk about a Merchant of Record (MoR) solution.

## 3 Major Types of E-Commerce Support

There are three major types of online payment solutions worth exploring when it comes to selling your game.

### Payment Service Providers (PSPs)

A PSP is a third-party organization that enables merchants to accept payments securely by connecting them to a broader financial infrastructure. They provide merchant accounts and payment gateways, which allow merchants to collect and manage payments efficiently through both technical and financial processing.

PSPs handle the payment processing, from when the customer initiates the transaction right up to the point when the funds are deposited into the business’ bank account. This solution means that the providers essentially assess the financial risk and take the necessary steps. In the end, you as a business are liable for everything. They’re often the most affordable option for smaller companies or those just starting out and tend to simply cover payment processing. In other words, there aren’t a lot of bells and whistles with this option and a lot of other responsibilities fall to the merchant to care for or contract with another third party.

### Payment Gateways

A payment gateway acts as the link between a game developer’s website and the customer, providing businesses with the necessary technology to accept debit or credit card payments from customers. It collects transactional customer information and passes them on to a payment processor or the acquiring bank.

In a sense, these gateways are similar to online point-of-sale machines. On the front end, it’s the partner you need to ensure payment processing; on the back end, it enacts transaction encryption and verification of payments. However, unlike a PSP, payment gateways only process payments and not the actual cash transfers. Plus, even if you are using a payment gateway, you will still be required to establish a contractual relationship with a bank or card acquirer.

### Merchants of Record (MoRs)

A Merchant of Record solution will provide your company with total commerce support for all game-related transactions. They are legal entities or organizations authorized to act as a reseller between two parties in an e-commerce transaction. An MoR accepts a large variety of credit card payment methods and bank transfers to e-wallets. The entity takes responsibility for reselling merchants’ products to customers worldwide while providing game devs with the tools needed to manage their overall business operations. This means there are a lot of features and functionalities that reach well into sales and marketing tools, payment processing services, compliance, and taxes.

One major advantage is that the Merchant of Record solution takes on the financial liability and risk on behalf of the merchant. They differ from PSPs and payment gateways in that the MoR is responsible for the entire customer interaction and everything going on in the background.

The company, in turn, doesn’t have to take financial liability or maintain banking relationships, merchant accounts, and payment gateways. Merchants receive the much-needed support and freedom to concentrate on growing their business, focusing on improving their game.

Additionally, working with an MoR solution makes sense, as the entire eCommerce flow is externalized to one system. This is a huge advantage for any business part of the video game market, as that system is easy to scale, integrate with new technologies and even manage gaming communities. In the absence of a centralized system, you would be required to integrate with multiple internal and external entities.

Read on to learn [what payment challenges video game companies are facing](https://blog.payproglobal.com/merchant-of-record-for-gaming-companies) and [how your gaming company can benefit from using MoR](https://blog.payproglobal.com/merchant-of-record-for-gaming-companies) on _[PayPro Global’s blog](https://blog.payproglobal.com/)._