Merchant of record or your own merchant account? What Visa’s rules actually define

What “merchant of record” means

In everyday payments language, the merchant of record is the business that sells to the customer in the card network’s eyes. Its name is on the card statement, it receives the money from the acquiring bank, and it answers for refunds, disputes and compliance with the card-network rules.

The phrase is industry language rather than a card-network term. Visa’s published rules, edition of 18 April 2026, do not use it. They describe the same question with their own defined roles, set out below, and those definitions are what an acquirer works from when it decides who may take a payment.

The roles Visa’s rules define

Each role below is quoted or closely summarised from Visa’s rules (edition of 18 April 2026). Mastercard has its own rules, which this guide does not cover.

Who may take the payment and receive the money

Visa’s deposit rules (section 1.5.6.1, Table 1-10) say a merchant may only submit a transaction it has completed with a cardholder, and a marketplace only a transaction between a cardholder and a retailer selling through that marketplace. Section 1.5.6.2 lists who an acquirer may pay directly: a merchant, a payment facilitator on behalf of a sponsored merchant, a sponsored merchant for its share if the acquirer also contracts with the payment facilitator, a digital wallet operator, a marketplace or a ramp provider.

In practice there are three set-ups. You hold your own merchant account and are the merchant. You are a sponsored merchant under a payment facilitator, which receives settlement and pays you. Or a marketplace or reseller service sells to the customer and pays you afterwards, so it is the business the customer bought from.

Scroll the table to see all columns.

Why high-risk businesses have fewer options

Visa’s marketplace qualification rule (section 5.3.4.1) says high-integrity risk merchants are not eligible to be marketplaces or retailers using a marketplace. Section 10.4.5.1 classifies a merchant as high-integrity risk when it must use one of Visa’s high-integrity risk category codes, and Visa’s Merchant Data Standards Manual (October 2026) lists the current codes: all card-absent sales under 5122 (drugs), 5912 (drug stores and pharmacies), 5966 (outbound telemarketing), 5967 (adult content and services), 5993 (cigar stores), 7273 (dating services) and 7995 (betting), plus certain card-absent sales under further codes, such as 5968 for subscription negative-option merchants.

Payment facilitators can serve such merchants, but Visa defines a separate high-integrity risk payment facilitator for that case, and section 10.4.5.2 requires the acquirer to monitor those merchants’ activity daily from the 31st day after their first deposit. A business that sells under one of these codes should therefore expect to be the merchant itself, or a sponsored merchant under a payment facilitator that its acquirer allows to serve that category. Our guide to high-risk category codes explains which code applies to which sale.

The USD 1 million threshold for sponsored merchants

Section 5.3.1.4 of Visa’s rules says an acquirer working with a payment facilitator must sign a direct merchant agreement with any sponsored merchant above USD 1 million in annual transaction volume: before processing for a sponsored merchant new to the payment facilitator, and within two years for an existing one. The payment facilitator may keep providing payment services, including settlement.

The rule lists exceptions, among them a relationship of at least two years with the same acquirer where the payment facilitator reports the sponsored merchant’s volume, disputes and fraud to the acquirer and the acquirer keeps overseeing the relationship. A growing business under a payment facilitator should ask now what happens to its account at that threshold.

What to ask before choosing a set-up

• Whose name will appear on the customer’s card statement, and in what form?
• Who receives settlement from the acquiring bank, and on what schedule are you paid after that?
• Who answers for disputes and refunds, and who pays the dispute fees?
• Does the provider’s acquirer allow your category code, and does the provider say so in writing?
• Is there a reserve, and who holds it?
• If you are a sponsored merchant, what happens when your volume passes USD 1 million a year?
• If the provider ends the arrangement, whose customer records and recurring billing permissions stay with you?

Questions, answered