Best Merchant of Record for Game Studios? 8 Questions To Ask

You’ve built the game, your website site is up, and the launch trailer is looking sharp. You’re ready to sell and monetize your hard labor. 

But there are still some major challenges to overcome before the game is launched: how best to monetize, how to handle payments — does it change for selling the game or selling in game store items?  And what does it take to successfully manage gaming payments so your game isn’t just fun, but also a financially successful and viable business? 

There are different routes to take in building the payment stack for a game studio, with pros and cons to each approach. Many leading studios partner with a Merchant of Record to handle the operational side of payments, and there are nuances to choosing the right partner and understanding what they provide. 

Here are 8 questions you should ask a Merchant of Record when evaluating who to work with: 

1. What types of payments do you support?
2. How do you handle international transactions and currencies?
3. What is your approach to tax compliance including VAT/GST?
4. What level of fraud protection and security do you offer?
5. How will you manage chargebacks and refunds?
6. What are your fees and pricing structure?
7. How easy is the integration process with our existing platforms?
8. How will you support our growth and future needs?

Let’s dive into each question… 

Merchant of Record?

…but first, some context! 

As explained in our guide for gaming payments, there are key differences between a Merchant of Record and other payment processors in the market.  

A payment processor never takes ownership of the goods and may or may not be on the hook for chargebacks and fraud disputes. On the other hand, a Merchant of Record  plays a different role in the transaction: they are the seller of the goods and take the responsibility of not only charging the buyer for the transaction but also delivering the goods. 

Simply put, a Merchant of Record offloads all the operational tasks related to payments and enables you to focus on what do best: creating one-of-a-kind experiences for your gamers. 

Now back to what questions you should ask a Merchant of Record. 

Question 1: What Types of Payments Do You Support?

In the same way that the world had evolved from cash only, to swiping credit cards in-store, to entering the card’s information in a web form, buyers now have even more ways to buy goods and services online. 

Furthermore, buyers have become accustomed to using their preferred payment method to make purchases quickly, seamlessly, and on their device of choice. Sellers need to meet buyers where they are and support the payment methods their customers are already using in a smooth and seamless way. 

Tebex supports over 125 payment methods globally. We’re proud to enable your customers to buy in the manner most convenient for them, including popular payment methods like Paypal, CashApp, iDeal and many many more. 

Question 2: How Do You Handle International Transactions and Currencies?

In the modern gaming industry, gamers are buying games and in-game items from globally, something using the seller’s currency and sometimes using their local currency. There are many behind the scenes ‘players’ involved when a payment is made from a buyer in one country to a seller in another country. 

Understanding how your Merchant of Record handles international transactions and what currencies they support, not just for the payment, but also what currencies they can hold, and what currencies they payout sellers is a crucial part of choosing the right partner. 

Tebex accepts payments worldwide, in multiple currencies while handling transactions across borders and regions seamlessly. We support multiple currencies for creator payouts to make it as easy as possible for our partners to receive funds in the currencies they prefer. 

Question 3: What Is Your Approach to Tax Compliance and VAT/GST Handling?

Benjamin Franklin famously said that nothing in life is certain except death and taxes. 

Though he did not have video game payments in mind at the time, the reality is that taxes are a permanent and complex area of gaming monetization. The right Merchant of Record partner must have the know-how and capabilities to navigate these complexities so the seller never faces a compliance or regulatory risk.

To illustrate this point, imagine a buyer making a purchase made in New York City. In this instance, the seller is responsible for

• 4.5% New York City Local Tax, and 
• 4% New York State Sales and Use Tax

And this is for one purchase, in one city, in one state, in one country. 

Every country, state, province, and city has laws and regulations that must be fully understood to remain tax-compliant. 

As a Merchant of Record, Tebex bears the burden of managing transaction-related tax responsibilities for each and every one of our partners. No matter where the seller or the buyers are located, Tebex takes on the responsibility of filing with the appropriate governmental agencies based on corresponding jurisdictions. You can read more about how Tebex handles all relevant taxes, including Variable Applicable Taxes, or Value Added Tax (VAT), here and also here.

Question 4: What Level of Fraud Protection and Security Do You Offer?

It’s no surprise that fraud prevention and security are absolutely critical to a digital industry like gaming. Gamers expect their payment details to be protected with the highest level of security, and studios need assurance that transactions are safeguarded against fraud and malicious activity. 

When evaluating a Merchant of Record, it’s essential to understand what measures they have in place to prevent fraud—both for the buyer’s protection and the studio’s financial security. Look for robust fraud detection protocols that recognize suspicious patterns and act quickly. Leading MoRs ensure that potential fraud is caught before it affects the studio’s revenue.

With Tebex, we prioritize security across all transactions, employing industry-standard protections to ensure buyer data and studio revenue are secure at every step.

Question 5: How Will You Manage Chargebacks and Refunds?

Chargebacks and refunds are a part of every major online business. However,managing chargebacks and refunds in-house is a time-consuming and often  costly operation for game studios. A Merchant of Record must establish a clear and well-defined process for managing chargebacks and refunds. This approach should minimize financial risk, ensure a positive experience for gamers, and relieve studios of operational tasks, allowing them to focus on their competitive advantages rather than on administrative payment work. 

Effective chargeback management requires documentation, information-gathering skills, and knowledge of local chargeback regulations to protect the studio’s revenue. Regarding  refunds, the Merchant of Record must have  an efficient process in place to process returns seamlessly. This guarantees that  customers aren’t frustrated and go  online to vent about the game (Which may not even be involved in the details of the refund dispute.)

At Tebex, we offer a 100% chargeback protection guarantee. This means that if a chargeback occurs—even if it is ultimately lost—our partners never pay a cent. Our studio partners’ minds are at ease knowing that any chargeback disputes are handled automatically by Tebex and never pose a risk to the studio or publisher.

Question 6: What Are Your Fees and Pricing Structure?

Nobody wants to pay more than they need to. And certainly, there isn’t a single person that enjoys  being confused about how much they’re paying for a service and what the fees will look like at the end of the month. 

Understanding the fees and pricing structure is crucial when selecting a Merchant of Record. . Flat rates per transaction, percentage-based fees, monthly subscription costs, or additional charges for specific services are all elements of a pricing plan different MoRs offer. 

These fees can add up quickly and impact profitability, so choosing  a provider with a straightforward, transparent pricing model is essential.

A transparent MoR offers a clear breakdown of fees, so partners know exactly what they’re paying for and what they’re getting in return, avoiding uncomfortable impacts on a studio’s  finance and budgeting.

Tebex offers one of the most streamlined and transparent pricing in the gaming industry: a simple 5% fee on transactions. There are no hidden charges, so studios have the confidence that they’re getting exactly what they signed up for.

Question 7: What Does the Integration Process Look Like?

Ensuring that a Merchant of Record integrates smoothly with the existing tech stack and workflows is essential to keep operations running smoothly.

A seamless integration is one where payments, taxes, billing, reporting, etc. all work harmoniously with the studio’s existing systems. Studios should ask about the level of technical expertise required, the tools and APIs available, and what the onboarding process looks like for new clients. 

Tebex offers game studios three implementation options to fit almost any game and in-game purchasing needs. Here’s an analogy from the baking world:

For a full turnkey solution, the Tebex Webstore Builder is like a ready-to-play campaign: getting started with the setup is fast and straightforward, allowing you to launch a frictionless and professional D2C (Direct to Consumer) webstore with minimal effort.

Tebex’s Headless API is more akin to a sandbox mode—with the core functionality of Tebex powering the freedom to customize the design and feel of the checkout form into in-game or existing webstore for a seamless experience.

For studios looking for even more control and customization, the Checkout API solution provides the entire Tebex Merchant of Record platform, including offering chargeback protection, fraud monitoring, global tax compliance, and more. It’s like a game development toolkit, making it ideal for advanced custom integrations.

Question 8: How Will You Support Our Growth and Future Needs?

Choosing the right Merchant of Record isn’t just about solving today’s challenges; it’s about finding the right partner who answers the studio's needs  as they grow and change. 

From entering new markets, handling increased transaction volumes, supporting regional pricing and the payment methods buyers want to use, a leading Merchant of Record doesn’t just remove the headache from payment operations; they make selling a seamless and valuable experience for sellers. 

Tebex is committed to building lasting partnerships with transparency and trust. Many of our clients have relied on Tebex for over 10 years, and we’ve continuously adapted to meet their changing needs as they’ve scaled. 

Whether supporting them in launching new games, adding new D2C channels, entering new markets, or implementing new features, Tebex is dedicated to helping our partners succeed in the long term. 

The Makings of a True and Lasting Merchant of Record Partnership

The right Merchant of Record assists clients in turning the challenges in gaming payment management, tax compliance, and fraud prevention into opportunities to make their brand stand out.

Knowing which questions to ask when evaluating a payment provider can be  critical in enabling game studios to focus on what they do best: create unique and compelling game experiences. 

With Tebex, you gain more than just another monetization engine; you gain a partner dedicated to your growth and enabling your success every step of the way. Ready to level up your payment operations? Reach out to Tebex today to learn why we’re known for Gaming Payments Done Right.