What is a Merchant of Record?
A Merchant of Record (MoR) is a term used to describe the entity authorized to process customer credit and debit card payments on behalf of a business. The MoR holds a merchant account with the processing bank.
If you are a Merchant of Record, you will be in charge of collecting and processing payments from your guests. You are responsible for the liability related to transactions, including maintaining payment card industry (PCI) compliance, ensuring adherence to tax laws, and accepting refunds and chargebacks.
Tour operators can either be their own MoR or rely on another service provider. For example, Expedia has two business models—the merchant model and the agency model. In the merchant model, Expedia is the Merchant of Record, and under the agency model, the activity supplier is the MoR.
Another example is Airbnb, which acts as the MoR. They charge the guests, collect payments, and wire the funds to property managers after deducting their fees.
Understanding Merchant of Record in the Zaui System
In Zaui’s Fee per Booking and the Free Plan, you, as the supplier, hold the Merchant of Record. The suppliers have control over their accounts.
They are financially liable for payment processing, refunds, cancellations, and payouts. However, processing through Stripe addresses the previous hassles around payment and data compliance.
Zaui acts only as a booking platform, decoupling itself from handling and holding supplier funds. Zaui Free customers hold the MoR. The suppliers will be in control of payment processing and funds by setting their MoR directly with Stripe.
It may not be the case for all reservation booking systems, with various other restech providers opting to act as the Merchant of Record instead of the supplier. They can limit operators from earning a business line of credit moving forward.
Benefits of Being a Merchant of Record
Gives You More Control: When you are the MoR, your business has a direct contract with the processing bank, giving you more control over your money. The guest payments go directly to your bank account, which means you have easier access to it with typically quicker payouts.
When someone else holds the MoR for your business, you will have to rely on their schedule for payments. And the revenue and cash flow are not in your hands.
Helps Your Future Business Moves: Being an MoR can help you build a strong credit score. The merchant account can help you get a new line of credit when your business scales up, especially for small tour operators.
Wrapping Up
The administrative and financial challenges of being a Merchant of Record may seem tricky. However, the control and flexibility it gives to your business make it convenient. Whatever payment-processing model you choose, make sure that it works best for you and is optimal for your business.
Looking for an online booking system equipped with payment gateways to boost your business? We can help you!
Talk to our experts to know how Zaui helps tour operators grow their business!
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Frequently Asked Questions
No. Zaui’s pricing is fully pay-as-you-go. You aren’t locked into any long-term contract. In fact, leading platforms emphasize this flexibility. Similarly, Zaui lets you start and stop anytime. You can change or cancel your plan freely, so you only pay for what you use.
Absolutely not. Zaui’s pricing is 100% transparent. We disclose all fees up front with no surprise add-ons or “sneak-in” charges. In fact, Zaui’s plans include all core features “without additional fees”. Industry experts note that hidden fees undermine trust so we avoid them entirely. All costs are clearly outlined in our pricing, and there are no extra setup charges or undisclosed surcharges at checkout.
Zaui integrates with major payment gateways (e.g. Stripe) so you only pay standard credit-card processing rates (roughly 1.9%+$0.30/transaction) and we don’t mark them up. Only the published platform commission is added on bookings. You also have full control over who pays the commission, we let you decide whether to absorb booking fees or pass them on to customers. In short, you’ll only pay the transparent booking commission and normal gateway fees, nothing extra.
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Of course. Zaui’s plans are fully flexible. You can upgrade or downgrade at any time to match your needs, without penalties. You can move to a higher tier or back down easily, and your billing adjusts automatically.
No. Zaui does not charge its commission on offline/manual bookings. “No fees on offline bookings” You only pay the commission when a booking is processed online through our system. Manual reservations (or bookings from partner channels we set up for you) incur no extra platform fee. (30% or less)
All of Zaui’s core features are included in your plan at no extra charge. We believe in value and transparency: Zaui provides over 15 advanced features (Google Things to do, reporting tools, marketing tools, reports, etc.) at no additional cost. Many competitors charge extra or require higher plans for the same features, but with Zaui you get the full suite of tools in one package. Any optional add-ons (if any) will always be clearly listed and optional there are no surprise paid upgrades for standard features.
Each Zaui plan is designed for clarity and fairness, following industry best practices. You can trust that our pricing is transparent and flexible, with the support you need built in.
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