Sometimes the name that you see on the receipt after making a purchase is not the name of the actual retailer. The entity that is charging payments for products and services and holds the amount paid by the customer before it is distributed among all the interested parties and affiliates is called the merchant of record. If you are a small-size merchant that needs to accept electronic payments, you would better use some larger company as your merchant of record. This company will handle different issues, related to deduction of fees and taxes, PCI compliance, disputing of chargebacks, and lots of other things for you, so that you can focus on your primary product or service. Larger-size merchants can afford being their own MORs, though some of them still prefer to operate through payment facilitators.
Want to learn more about the differences and similarities between merchant of record and payment facilitator concepts? Go to Paylosophy blog, where an article on the subject has been recently published.