Understanding Merchant on Record

3 min read

K

Kehinde

Manager, Product Marketing

The African Continental Free Trade Area (AfCFTA) offers a historic chance for trade within Africa. It seeks a unified market that stretches from Cairo to Cape Town and Kano, allowing the free flow of people, goods, and services.

For entrepreneurs, it’s a dream of accessing over a billion new customers. For those who have tried to do business across African borders, the reality can be a nightmare. The processes are often complex and fragmented.

You face currency conversion issues, tricky tax laws, unexpected customs fees, and the ongoing risk of payment failures.

While the AfCFTA provides the policy framework for trade, a powerful operational tool is needed to make this dream a reality.

Merchant of record (MoR) is one of the most effective ways African business can use to ease the burden associated with intra-African trade.

What Exactly is a Merchant on Record (MoR)?

A Merchant on Record (MoR) is a legal entity. It takes on all financial and legal duties for selling to customers on your behalf.

Think of an MoR as your business's financial and legal co-pilot for every cross-border transaction. You, the pilot, focus on what you do best: creating and supplying great products to your customers.

The MoR expertly handles the complex process of cross-border payment. It also manages tax laws, compliance, and currency conversions. This ensures funds arrive safely and on time.

The core function is this: for that specific transaction, the MoR becomes the "seller" in the eyes of the law and the banks, assuming all the associated liability. This single shift is what unlocks seamless global commerce.

MoR vs. Payment Service Provider (PSP): What’s the difference?

Many African businesses are familiar with Payment Service Providers (PSPs) or payment gateways. They are essential tools, but their role is fundamentally different from an MoR's. A PSP is like a secured armored truck that moves money from your customer's bank to yours. An MoR on the other hand is the entity that owns the entire financial logistics and security operation for that journey.

Here’s a clear breakdown:

The Core Functions of MoR

Working with an MoR helps you handle complex and resource-intensive parts of international trade.

This allows you to focus on delivering the goods to the customer across the border instead of getting bogged down in administration.

• Global Tax & VAT Management: Imagine trying to understand, calculate, collect, and remit the right sales tax or VAT in Nigeria, Kenya, South Africa, and Egypt all at once. It’s a full-time job fraught with risk. An MoR handles this entire process for every transaction, ensuring you are always compliant.
• Full Compliance Process: Each country has its own laws on consumer protection, data privacy, and finance, not just taxes. An MoR knows how to handle this tricky compliance process. They keep up with all the changes, so your business doesn’t have to.
• Seamless Payment Processing: An MoR connects with different banks and payment gateways across the continent. They can provide customers with their preferred local payment options, such as M-Pesa, Mobile Money, or local cards. This greatly boosts transaction success rates.
• Fraud & Chargeback Mitigation: International transactions carry a higher risk of fraud. An MoR employs sophisticated fraud detection systems. They manage the whole process of customer disputes and chargebacks. This protects your revenue and reputation from financial and administrative issues.

The Unique Challenge of Intra-African Trade

While the benefits of an MoR are global, they are especially crucial for the unique challenges present in the African market.

• Currency Fragmentation: The continent has over 40 different currencies. A simple transaction between Ghana and Nigeria involves converting Cedis to Dollars and then Dollars to Naira, with fees and volatility at each step. This process is slow, expensive, and eats into profits.
• Regulatory Inconsistencies: There is no single set of trade laws. A business must follow the rules of regional blocs like ECOWAS, EAC, and SADC. It also needs to manage national customs duties and import/export documents. A simple payment processor cannot solve or handle this.
• The Trust & Logistics Gap: Perhaps one of the biggest hurdles for intra-africa trade is the lack of trust and visibility. How do you verify a new supplier in another country? How do you ensure you’ll get paid? How do you coordinate shipping and clearing? These are questions that go far beyond simple payment processing.

How Brydge Serves as the Merchant on Record Built intra-Africa Trade

Brydge emerges not just as an MoR, but the all in one platform for intra-Africa-trade that enables end-to-end trade across Africa from sourcing to settlement.

Here’s how Brydge directly addresses the pain points of intra-African trade:

• Problem: Currency Fragmentation:

Brydge Solution: Brydge enables instant cross-border settlement in local currencies. A Nigerian business can pay in Naira, and their Kenyan supplier receives Kenyan Shillings instantly. Brydge handles all the complex FX conversion and settlement tasks behind the scenes. This way, a cross-border trade feels just like a simple domestic trade.

• Problem: Regulatory Inconsistency:

Brydge Solution: As your MoR, Brydge takes on the full compliance burden for each business transaction. From calculating the correct VAT to ensuring adherence to local trade laws, Brydge acts as your shield against regulatory complexity.

• Problem: Trust & Logistics Gap

Brydge Solution: Brydge is more than a payment facilitator; it's a trusted trade ecosystem. It provides access to a network of verified suppliers, buyers, and logistics partners. This solves the critical problem of trust and simplifies the entire supply chain, from sourcing to delivery.

Brydge is your trusted partner. It makes complex transactions simple and secure. No matter the currencies or regulations, Brydge turns everything into one straightforward deal for your business.

Conclusion

The AfCFTA has opened the door to a continent of opportunity. But to walk through that door and truly scale, businesses need more than just a payment button. They need a true partner to absorb the immense complexity of intra-African trade.

Brydge is that one partner you need for any intra-Africa trade. We handle all the complexity associated with payments, compliance, taxes, and liability, so that you can focus on what you do best: build your business.

Ready to simplify your cross-border trade? Explore how Brydge can be your Merchant on Record today.