October 11, 2019
Written by
James Davis
Written by James Davis
Senior Technical Writer at United Thinkers

Author of the Paylosophy blog, a veteran writer, and a stock analyst with extensive knowledge and experience in the financial services industry that allows me to cover the latest payment industry news, developments, and insights. Read more

Reviewed by
Kathrine Pensatori
Product Specialist at United Thinkers

Product specialist with more than 10 years of experience in the Payment Processing Industry. I help payment facilitators and PSPs solve their various payment processing issues. Read more

MOR Model

Table of Contents
Table of Contents

Key Takeaways

  • EMV Certification Importance for Payment Security: EMV certification, representing Europay, Mastercard, and Visa standards, is crucial for payment gateways and proprietary payment ecosystems to ensure secure card-present transactions, especially with the advancement of NFC technology and SoftPOS solutions.
  • Comprehensive Process for EMV Certification: Entities seeking EMV certification must consider hardware (terminals, SoftPOS solutions), payment gateways, and acquirers. The process involves host integration for message format consistency and the use of EMV toolkits for certification tests.
  • Steps and Requirements for Certification: The certification requires compiling lists of target countries, acquirers, and devices, selecting EMV toolkits, and developing terminal applications. Each new device requires separate certification, with a focus on EMV Level 1 and Level 2 certifications for terminals and card readers.
  • Cost Considerations: Businesses should prepare for significant costs, including administrative fees to acquirers (approximately $2,000) and EMV toolkit licensing (around $20,000), underscoring the need for budget planning in advance.


Merchant of Record

Merchant of record or MOR is an essential link between a company that needs to accept electronic payments and consumers of its products. Merchant of record concept goes far beyond collecting payments for products and services. MOR is responsible for many things related to sales process, such as merchant funding, withholding of taxes and transaction processing fees, chargeback management, etc. If a merchant operates through some online marketplace, then its MOR is also responsible for split funding credit card processing mechanisms. As a result, small-to-medium-size businesses prefer to use larger entities as their merchants of record, because they are unable to perform all MOR-specific functions themselves. At first it may seem that merchant on record and payment facilitator concepts are almost the same. However, PayFac concept is more flexible. As small business grows, MOR model might become too restraining, while payment facilitators provide robust APIs, which sometimes allow merchants to customize each function separately, according to their specific needs. To put it simple, not all merchants of record are PayFacs (master merchants) and not all PayFacs are MORs.

Read more about merchant of record concept in our respective article on Paylosophy.

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