Payrails Launches Hybrid Merchant of Record to Streamline Global SaaS and AI Payments

Payrails has launched a Merchant of Record (MoR) solution designed to eliminate the technical debt typically associated with scaling international payments. By allowing digital businesses to run MoR services alongside direct acquiring on a single orchestration platform, the firm is addressing the historical "lock-in" that prevents growing SaaS and AI companies from optimizing their payment stacks.

What was announced

The new Payrails Merchant of Record service is positioned as a solution "built to be outgrown" for AI, SaaS, and mobile app developers. Functioning as the legal seller for digital products, Payrails takes over the complexities of global commerce, including the calculation, collection, and remittance of sales tax, VAT, and GST. The service also manages invoicing, regulatory compliance, fraud prevention, and dispute handling across international borders.

The core differentiator is a hybrid operational model. Merchants can utilize the MoR service in specific regions where they lack a local entity while simultaneously using their own merchant IDs and direct acquiring relationships in established markets. This transition is managed through the existing Payrails orchestration layer, meaning companies can move a market from the MoR to an in-house setup without a full technical re-integration. This allows businesses to maintain their existing workflows while changing the underlying legal seller status.

Data visibility remains a priority, with the Payrails portal providing full access to authorization rates, chargeback metrics, and fraud performance—data often obscured by traditional MoR providers. Furthermore, the Payrails Token Vault ensures that saved payment methods remain independent of any single provider, allowing customer payment credentials to move with the merchant as their infrastructure evolves. The service is available globally starting today, targeting the rapid international expansion seen in the AI sector, where the top 100 firms now generate 48% of their revenue outside their home markets, requiring support for local methods like Pix in Brazil, BLIK in Poland, and UPI in India.

"Every merchant of record is a temporary answer to a permanent problem. Companies need one to get into new markets quickly, and then spend years trying to get back out. We're payments experts first, so we built Payrails MoR the way we'd want to use it: open, optimized for conversion, and with the option to move a market to your own setup without rebuilding anything. You keep all the benefits of staying on the same platform."

Orkhan Abdullayev, CEO / Co-Founder, Payrails

The companies involved

Payrails is a fintech specialist focused on payment orchestration and financial operations for global enterprises. The company was founded by a team of payments experts, including CEO Orkhan Abdullayev and COO Emre Talay, who previously held leadership roles at major delivery and fintech platforms. The firm has positioned itself as a high-performance alternative to rigid payment gateways, offering a modular platform that allows businesses to build, scale, and optimize their entire payment lifecycle.

The company’s architecture is designed to decouple payment logic from the underlying infrastructure, providing merchants with the flexibility to route transactions across multiple providers. This approach is particularly relevant for high-growth sectors like the gig economy, digital marketplaces, and subscription-based software services. By providing tools for ledger management, automated reconciliation, and now a Merchant of Record service, Payrails competes in the enterprise space by offering deeper control over the financial stack than traditional all-in-one processors. In June 2025, the company reinforced its market position by raising $32 million in a Series A funding round.

What FF News has reported before

FF News has closely tracked the expansion of Payrails as it builds out its global infrastructure. In mid-2025, the company secured significant capital to fuel its mission, as reported in Payrails Raises $32m Series A to Help Global Enterprises Maximize Payment Performance. This funding has supported high-profile implementations, such as the one detailed in Payrails Supports Flix with Scalable Payment Solutions to Fuel Global Growth.

More recently, the firm has focused on strategic partnerships and geographic expansion. In February 2026, the company announced a major move into the Middle East, covered in Payrails to Set Up Middle East Headquarters in Dubai. This followed a significant collaboration with Ecommpay, which we reported on in Ecommpay Announces Strategic Partnership with Payrails to Revolutionise Global Payments for Enterprises, highlighting the company's growing influence in the enterprise payment orchestration market.

What this means

This launch represents a strategic shift in the Merchant of Record market, which has long been criticized for creating "golden handcuffs." For years, the trade-off for offloading tax and compliance was a loss of control over payment data and the inability to negotiate direct acquiring rates as a business matured. By offering a "built to be outgrown" model, Payrails is challenging the industry standard that MoR must be a permanent architectural choice. This puts significant pressure on legacy MoR providers to justify their closed ecosystems. As AI-driven software companies continue to globalize at unprecedented speeds, the demand for transitional MoR services will likely force a broader re-evaluation of how international tax compliance is bundled with payment processing.