MoR vs PSP vs Payment Orchestrator: Which Is Best for Your Digital Business?

Expanding globally is exciting. But managing payments across multiple regions? That’s where things get tricky. Customers expect frictionless transactions, local payment methods, and airtight security—especially in gaming. Choosing the right payment model isn’t just a technical decision; it shapes how you scale and grow. From handling alternative payment methods to ensuring tax compliance and fraud prevention, it’s a lot to juggle.

The right payment model can streamline operations and drive serious growth. The challenge? There’s no one-size-fits-all approach. 

Businesses can choose between a Merchant of Record (MoR), Payment Service Provider (PSP), or Payment Orchestrator (PO)—each with its own strengths. The decision you make will impact everything from regulatory compliance to cost efficiency and payment performance, particularly for digital goods and services.

So, which model do publishers prefer—and why? How do you determine the best fit for your business?

In this blog, we’ll break down how each model works, their pros and cons, and key considerations to help you make an informed choice.

Merchants of Record vs. Payment Providers vs. Orchestrators—What You Need to Know

What is a Payment Orchestrator (PO)?

A PO acts as a centralized hub, connecting multiple payment gateways, processors, and financial service providers within a single API. 

By consolidating multiple payment services, a PO enables businesses to manage transactions more efficiently and strategically.

How It Works:

1. Payment Selection: Customers select from multiple payment options—credit cards, e-wallets, bank transfers—through a single API.
2. Smart Routing: Transactions are routed dynamically based on cost, success rates, customer preferences, and regional regulations to maximize payment success.
3. Transaction Handling: Enabling secure transaction processing through selected providers, with automatic reconciliation across all payment channels.
4. Analysis: Centralized insights into payment trends, payment channel performance, and customer behavior to optimize payment strategies.

For gaming businesses expanding globally, a PO simplifies managing multiple PSPs and local payment methods. It reduces failures, increases success rates, and ensures a smoother player experience—ideal for handling high-volume, complex transactions.

What is a Merchant of Record (MoR)?

An MoR is more than just a payment facilitator—it’s a legal entity responsible for selling your digital goods. Think of it as an all-in-one payment partner. When you use an MoR, they become the party responsible for the transaction, not just a technical intermediary.

Unlike a PO, which focuses on streamlining transactions, an MoR manages the entire payment lifecycle, including tax compliance, fraud prevention, and customer support. The MoR owns the customer relationship from a commercial and regulatory perspective, handling everything from payment collection to tax and compliance obligations. It acts as the legal intermediary between your business and the end customer, ensuring smooth operations across multiple markets.

How It Works:

1. Payment Selection: Like a PO, an MoR allows customers to choose from multiple payment methods—credit cards, e-wallets, bank transfers—through a single API integration. However, the MOR provides payment options as the legal seller, not on behalf of another party.
2. Transaction Ownership & Compliance: Unlike a PO, an MoR is the legal seller of record, taking care of compliance, taxes, and risk management so businesses don’t have to.
3. Localized Transactions: MoRs often operate through a network of local legal entities worldwide, making local currency processing and tax compliance seamless. They also handle payouts in preferred local currencies, helping businesses avoid hefty FX fees.

For lean gaming developers selling directly to consumers worldwide, an MoR simplifies international compliance and tax management, freeing teams to focus on product development and marketing.

What is a Payment Service Provider (PSP)?

A PSP is a third-party service that facilitates electronic payments. Unlike an MoR, a PSP focuses primarily on facilitating the technical processing of payment transactions—they don’t handle compliance, tax obligations, risk management, or legal liability related to the sale.

Some PSPs offer fraud detection and chargeback management, but often at an extra cost. APM availability varies by provider, which can limit payment options.

How It Works:

1. Act as a Payment Gateway: Securely transmits payment information among customers, businesses, and the acquiring banks.
2. Act as a Payment Processor: Authorizes, clears, and settles transactions, ensuring funds are transferred securely and efficiently.

For gaming businesses with lower transaction volumes or those operating in select markets, PSP offers a lean setup with more control over the payment experience—without the added legal and compliance infrastructure required by an MoR model. Some PSPs may offer value-added services such as fraud detection, chargeback management, or tokenization, though these may come at additional cost or require custom integration.

Which Payment Model Sets You Up for Success? MoR, PSP, or PO? 

Unlock Revenue: Choosing the Right Payment Model for Your Digital Business

Every business has unique payment needs. The right monetization strategy could maximize your revenue. 

Here’s a look at today’s top digital business models and how they make bank.

1. Subscription Services
   • A recurring revenue model where users pay a monthly or annual fee for continuous access to a product or service. This is common for SaaS platforms, streaming services, and premium newsletters.
2. Transactional (One-Time Purchase) Models
   • Customers make a single payment to buy a product or service—typical in e-commerce stores, digital downloads, and direct-to-consumer retail.
3. Marketplace Platforms
   • Marketplaces connect buyers and sellers while earning revenue through commissions, listing fees, or transaction fees. Examples include Etsy, Airbnb, and app marketplaces.
4. Ad-Supported (Freemium) Platforms
   • These platforms provide free access while monetizing through advertisements or premium upgrades. Users can pay for an ad-free experience or exclusive content—think Spotify, YouTube Premium, or free-to-play mobile apps.
5. Gaming
   • The gaming industry leads in digital monetization, with models including:
     • In-game purchases: Virtual goods, skins, and power-ups.
     • Battle passes & content updates: Subscription-like models for new content or seasonal rewards.
     • One-time purchases: Full-game sales or downloadable expansions.
6. Streaming Media
   • Streaming platforms monetize content through subscriptions, ads, or pay-per-view models. Think Netflix, Disney+, or Twitch.
7. eBooks & Digital Media
   • Digital media businesses sell and distribute licensed content like eBooks, audiobooks, and online courses. Models range from one-time sales to subscription-based access, similar to Kindle Unlimited or MasterClass.

Each monetization model has its own challenges—scaling globally, handling microtransactions, managing compliance, or keeping costs in check. The best payment model (MoR, PSP, or PO) depends on four key components.

Whether you’re running a SaaS platform, marketplace, or gaming app, aligning your payment infrastructure with your business model ensures seamless revenue growth and a frictionless experience for your customers.

Still unsure about which approach works best? Here’s a quick breakdown on how to choose the right payment model based on your business model and company maturity—more details in the next section.

What to Consider When Choosing the Right Payment Model

1. Monetization Strategy – What drives your revenue?
   • Subscription-based? MoR’s got you covered with simplified compliance for recurring payments 
   • Microtransactions? PO optimizes transaction success rates with smart routing of high volumes of low-value transactions.
   • Hybrid model? Combine MoR and PO for a balanced solution to both compliance and efficiency.
2. Total Cost of Ownership (TCO)
   • MoR: Higher upfront fees, but savings on compliance, tax management, and fraud prevention free up internal resources, resulting in long-term operational savings.
   • PSP: Lower transaction fees initially, but hidden costs add up—compliance, fraud prevention, and chargeback management often require in-house resources.
   • PO: Subscription and integration fees may seem high, but optimized transaction routing boosts approval rates, potentially offsetting costs and increasing revenue.
3. Team Size & Expertise
   • Small teams? An MoR removes the need for in-house compliance and fraud specialists, letting you focus on growth.
   • Larger teams? A PO’s efficiency gains make it worth the added complexity, especially if you have a team to manage integrations and payment performance.

Common Pitfalls That Gaming Businesses Face

Skipping Alternative Payment Methods (APM) Localization

Gamers worldwide pay differently—whether through digital wallets, mobile payments, bank transfers, or region-specific options. Skipping local payment options can lead to more abandoned carts and lost revenue. 

A PO or an MoR with strong APM support keeps transactions smooth and customers happy.

Underestimating Tax Reporting Complexities

International tax compliance is a moving target, and many gaming businesses underestimate its complexity. Different countries have varying VAT/GST requirements, such as EU VAT rules or GST in a growing number of markets in APAC regions. In the Philippines, for example, a new 12% VAT on digital services takes effect in 2025, requiring both resident and non-resident providers to register and remit taxes on revenue from digital transactions.

Non-compliance can lead to hefty fines and reputational damage, and handling tax calculations, filings, and audits internally can quickly become overwhelming—especially for businesses selling globally. Letting an MoR handle tax compliance keeps your business on top of changing regulations, allowing your team to scale without the compliance burden.

Emerging Trends in the Payments Landscape

AI in Fraud Detection

As digital payments grow, so do fraud risks. Artificial intelligence (AI) is becoming an important technology for MoRs and POs, helping businesses stay ahead of evolving threats.

AI-powered fraud detection analyzes transaction patterns in real-time, identifying suspicious activity before it impacts revenue or customer trust. For gaming businesses handling high-volume microtransactions, AI helps catch fraud, prevent chargebacks, and reduce false declines—keeping payments smooth and secure.

As machine learning advances, integrating AI into payment systems is quickly becoming the industry standard for fraud prevention. Are you keeping up? Businesses that leverage AI-driven security measures will be better positioned to minimize risk and maintain a secure, frictionless payment experience.

Out-of-App Payments: The Rise of Web Store and D2C Options

With app store commissions cutting into profits, more game developers are shifting to out-of-app, direct-to-consumer (D2C) payment options—think web stores and browser-based transactions.

Going D2C isn’t just about bypassing platform fees—it’s about greater flexibility in offering localized payment methods, deeper customer relationships, and full control over the user experience.

POs make it easy, seamlessly integrating multiple PSPs and localized APMs on a single platform — at Coda, we offer over 400 payment methods across 70+ markets. Smart routing optimizes transaction success rates, ensuring smoother payments and fewer failed transactions.

Want higher margins, better control, and a direct connection with your players? Out-of-app payments puts you in charge.

FAQs

1. Can I switch models later?

Yes, but transitions can be tricky. It’s best to plan for growth and flexibility from the get-go. 

2. Which model supports payouts?

MoRs often support payouts directly, while POs can integrate multiple PSPs to facilitate payouts. PSPs typically don’t handle direct payouts beyond standard fund settlements.

3. Which model is best for global expansion?

If you’re scaling internationally, MoR is your best bet since it manages compliance, tax obligations, and regulatory requirements across multiple regions. 

4. I want more control over payment processing—what works best?

A PSP gives you full control over your, providers, routing, and transaction flows. Just remember, you’ll also need to handle tax compliance, fraud management, and regulatory complexities yourself.

5. Which is the most cost-effective model?

• PSP: Lower upfront costs, but hidden costs for fraud prevention, compliance, and APM integration can add up.
• MoR: Higher fees, but saves businesses money in the long run by covering compliance, tax handling, and fraud management.
• PO: Typically has a subscription + transaction fee structure, but can increase revenue through optimized payment routing.

6. How easy is it to add new payment methods in each model?

• PSP: Adding APMs can be time-consuming and often depends on whether the PSP supports the payment method.
• MoR: Offers greater flexibility, seamlessly integrating multiple PSPs and APMs.
• PO: Provides the best flexibility by allowing merchants to plug into multiple PSPs without the need for direct integration.

7. Which model is best for handling high transaction volumes?

• PSP: Works well for low to mid-volume transactions, but may struggle with scalability compared to MoRs and POs.
• MoR: Ideal for businesses with consistent, high transaction volumes, particularly in global markets with complex tax and compliance needs.
• PO: Best for businesses handling large-scale transactions with multiple PSPs, allowing smart routing for higher success rates.

Final Thoughts

MoR, PSP, or PO? The right choice depends on your business model, target regions, and in-house capabilities. 

MoR simplifies compliance, PSPs suit smaller setups with basic needs, and POs optimize payments for growing businesses. Choose the model that drives your success. Ready to streamline your payment processes?

Talk to us and find the right solution for your digital business.

Disclaimer: The information provided in this article is for general informational purposes only and is not intended as legal, tax, or regulatory advice. Readers should consult their own professional advisors to understand how these concepts apply to their specific circumstances.