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Introduction

Digital businesses and SaaS companies that sell globally choose between two models: a Merchant of Record (MoR) or a Payment Gateway (PG). Dodo Payments operates as a Merchant of Record. This guide compares the two models so you can decide which one fits your business.

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The Core Difference

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What It Means For You

With Dodo as your MoR, we are the legal seller to your customers, so you can:
  • Sell in new countries without setting up local entities
  • Skip VAT, GST, and sales tax registration and filing
  • Offer more payment methods worldwide
  • Reduce your tax and regulatory exposure
  • Launch in new markets faster
Suppose you sell a digital subscription to a customer in France. Dodo Payments collects the payment, charges and remits French VAT, and pays you the net revenue. You do not register for VAT or file returns in France.
The MoR model also simplifies your back office. As your MoR, Dodo handles PCI compliance, fraud screening, currency conversion, and customer billing support, so your team can focus on product and growth.

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Visual Comparison

Revenue Flow: Payment Gateway Revenue Flow: Merchant of Record (Dodo)

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Why It Matters for SaaS & Digital Businesses

As your business grows, taxes, compliance, and local payment preferences take more work. With a payment gateway, you are responsible for:
  • VAT/GST registration and filing in multiple jurisdictions
  • Currency conversion and chargebacks
  • Localized checkout and payment methods
With Dodo Payments as your MoR:
  • You expand globally without setting up local entities
  • We calculate, collect, and remit taxes on your behalf
  • You offer payment methods suited to each customer’s country
  • We act as the legal seller and run billing operations for you
A payment gateway moves the money. A Merchant of Record moves the money and also takes on the legal sale, tax, and billing work around it.

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Who Should Use MoR?

Dodo Payments suits:
  • SaaS and digital product companies
  • Independent creators and solo founders
  • Businesses with customers in many countries
  • Companies that do not want to manage taxes and compliance in-house
If you are expanding internationally, selling subscriptions, or want less operational work, an MoR is usually the better fit.

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When to Use a Payment Gateway Instead

A payment gateway alone can make sense when:
  • Your business operates in only one country
  • You already have internal finance and compliance resources
  • You need complete control over the customer billing experience
  • You are highly cost-sensitive with thin margins at scale
For many startups, a gateway is enough at first. As complexity grows, moving to an MoR can save time, reduce risk, and speed up international growth.

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Why Choose Dodo Payments

Dodo Payments offers:
  • Payments, tax, and compliance in one platform
  • Multi-currency pricing and payouts in USD, EUR, or GBP
  • Access to 40+ payment methods
  • Seat-based billing, subscriptions, and one-time payments
  • Automated tax handling in 220+ countries
  • Built-in fraud prevention and PCI compliance
Whether you are a solo founder or a growing SaaS team, Dodo Payments handles the tax and compliance work of selling globally.

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Learn More

Adaptive Currency Support

Learn how Dodo shows prices in your customers’ local currencies

Supported Payment Methods

See the 40+ payment methods available through Dodo Payments

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Dodo Payments handles tax, compliance, and billing, so you can focus on building your product.
Last modified on September 26, 2026