The Merchant of Record (MoR) is the entity or host that is responsible for handling payments, collecting taxes, and ensuring legal compliance during transactions. In short-term vacation rentals, the MoR defines who is responsible for managing and overseeing financial transactions between guests and property owners or managers. This allows property managers or owners to maintain direct control over these financial transactions.
Acting as the Merchant of Record (MoR) may seem daunting, but using robust OwnerRez tools and integrating with one of the many OwnerRez Payment Processors, such as Lynnbrook Group and Stripe, can significantly simplify those responsibilities.
Some listing channels, such as Airbnb, will always serve as the Merchant of Record (MoR), regardless of whether your properties are integrated via API.
Conversely, channels like Vrbo require you to act as MoR when your property is API-integrated. It’s important to note that Vrbo will continue to act as the MoR for properties connected through iCal.
OwnerRez is fully Payment Card Industry (PCI) compliant, and our systems have undergone a specific design to align with PCI best practices. We encrypt and store credit card information in the same way as payment processors, using the same secure protocols. We are also PCI certified and can supply that documentation to you at any time - just ask for it via the Helpdesk.
Responsibilities
Owners and/or Property managers who act as their own Merchant of Record (MoR) must handle several tasks.
Utilizing a reliable payment gateway or processing service is essential to ensuring a smooth and secure payment experience for your guests. This allows for the safe handling of all guest transactions, providing peace of mind for both you and your guests.
Additionally, it is important to be diligent in collecting and remitting all relevant taxes to the appropriate local authorities. Staying compliant with tax regulations not only protects your business but also fosters trust with your customers.
It is crucial to handle financial disputes, chargebacks, and refund requests independently. This means developing a clear and efficient process for addressing these issues and ensuring that guests feel valued and heard.
Lastly, maintaining accurate and organized records of all guest transactions is vital. This includes documenting payment details, transaction dates, and any relevant communications. Having a meticulous record-keeping system will help streamline your operations and support any necessary audits or inquiries in the future.
Advantages
Relying on a third-party OwnerRez payment gateway or processor to assist you as a Merchant of Record (MoR) often depends on scale, resources, and your comfort with managing financial and legal complexities.
Maintaining the oversight of financial processes, such as guest payments and security deposits, is essential for your vacation rental business.
By overseeing and streamlining your operations, you gain better visibility and control over your finances, leading to improved efficiency and accuracy in reporting for informed decision-making. This approach also allows owners and property managers to tailor their operations to their specific business needs.
Challenges
Acting as your own Merchant of Record (MoR) through a third-party OwnerRez payment gateway or processor can offer significant benefits, such as greater control over transactions and potentially lower processing fees. However, it also comes with challenges that businesses need to address.
Complying with local tax regulations is crucial. However, staying proactively informed about current tax law changes and adopting effective strategies for adherence can minimize any potential legal issues.
Chargebacks can happen to anyone, but the use of robust OwnerRez tools can mitigate those challenges.
Compliance with payment processing laws is also critical, as maintaining Payment Card Industry (PCI) compliance protects sensitive payment information.