What is a merchant of record, and does a prop firm need one?

How it works:

• The merchant of record sells your product, collects payment and handles taxes such as VAT.
• You receive the proceeds minus their fee.
• They handle chargebacks and refunds under their policies.

For prop firms:

• Acceptance is limited, because of the high-risk profile.
• Where available, it removes much of the indirect tax burden.
• You still pay traders yourself; a merchant of record covers sales, not payouts.

For comparison, PropExecutor sells its own plans to firms through Dodo Payments acting as merchant of record. That relationship covers your purchase from PropExecutor, not your traders' purchases from you. This is general information.

When it is worth pursuing

If you sell to many countries with consumer sales taxes, a merchant of record can save significant compliance work. Ask several providers directly whether they accept prop evaluations before planning around one.

Ask also how payouts to traders would sit alongside it, since the merchant of record covers your sales only.