Why merchants assume they need a local company
Local payment methods are run by domestic banks, wallets, and schemes that were built for locally registered businesses. It is natural to assume you must be local to plug in. In some markets certain regulated methods or the best pricing do require a local entity, and a few countries make cross-border collection harder for specific industries. But the default assumption that you must incorporate first is usually wrong. Providers have spent years building bridges that let a foreign merchant appear local enough to accept local rails, so you can test demand before committing to the cost and time of setting up a company.
- Local schemes were built for domestic businesses, creating the 'must be local' myth.
- A few methods or industries do require a local entity for full access.
- You can usually test a market before incorporating.
- Providers build bridges so foreign merchants can accept local rails.
Option 1: Cross-border collection through a PSP
The simplest route is a PSP or cross-border specialist that accepts payments in a country and settles to your foreign account. The transaction is processed as cross-border but still uses the local method the shopper knows, such as Pix in Brazil or OXXO in Mexico. The trade-off is that cross-border processing can have lower card approval and slightly higher cost than true local acquiring, and settlement may be in a foreign currency. For many merchants this is the right first step because it needs no local entity and can go live quickly.
- A PSP collects locally but settles to your foreign account.
- Shoppers still use familiar methods like Pix or OXXO.
- Approval can be lower than local acquiring for cards.
- Fastest path with no local company required.
Option 2: Aggregator or payment facilitator
An aggregator onboards you under its own licensed account, so you never need your own merchant account or local company. You get access to many local methods through one integration and one contract. This is why a small merchant can suddenly accept QRIS in Indonesia or SPEI in Mexico without any local paperwork. The downside is shared-account risk: if the aggregator's risk engine flags activity, payouts can be delayed. For most small and mid-size cross-border sellers, the speed and simplicity outweigh that risk, especially when you keep a backup provider connected.
- Aggregators onboard you under their licensed account.
- No local company or own merchant account needed.
- One integration opens many local methods.
- Keep a backup provider to reduce shared-account risk.
Option 3: Merchant of record
A merchant of record (MoR) becomes the legal seller of the transaction on your behalf. It handles payment processing, tax collection and remittance, fraud, refunds, and chargebacks, while you keep control of your product and pricing. This is the strongest 'no local entity' option because it also removes the tax and compliance burden of selling into a new country. MoR is especially useful for digital goods, SaaS, subscriptions, gaming, and content where indirect tax and consumer-law exposure are high. Providers like Stripe Managed Payments and specialized MoR platforms let you launch in many countries without registering locally.
- An MoR is the legal seller and takes on tax and compliance.
- It handles payments, fraud, refunds, and chargebacks for you.
- Best for digital goods, SaaS, subscriptions, and content.
- Lets you launch in many countries without local registration.
When you still may want a local entity
Going local makes sense once a market proves itself. A local entity often unlocks lower fees, true local acquiring with higher approval, access to methods reserved for domestic businesses, and the ability to hold and pay out in the local currency natively. It also helps with consumer trust, local contracts, and hiring. The smart sequence is usually: start cross-border or via MoR to validate demand, then open a local entity only for markets where volume justifies the setup cost and ongoing compliance work.
- Local entities unlock lower fees and higher approval.
- Some methods are reserved for domestic businesses only.
- Holding local currency natively avoids forced conversion.
- Open a local entity only after a market proves its volume.
Questions merchants ask
Can I accept Pix in Brazil without a Brazilian company?
Yes. Cross-border PSPs and merchant-of-record providers let foreign merchants collect Pix and other Brazilian methods without a local entity. You will likely settle in a foreign currency or through a cross-border flow, which can cost a bit more than local acquiring, but it is a practical way to start selling in Brazil immediately.
What is the difference between an aggregator and a merchant of record?
Both let you avoid a local entity. An aggregator gives you access to payment methods under its account but you remain responsible for tax and compliance. A merchant of record goes further and becomes the legal seller, taking on tax collection, fraud, refunds, and chargebacks. MoR is heavier on compliance relief, which matters most for digital and cross-border content sales.
Will I pay more without a local entity?
Often yes, at least on paper. Cross-border and aggregated flows can carry higher fees or wider FX spreads than true local acquiring. But the alternative, opening and running a local company, has its own real costs. Many merchants accept slightly higher per-transaction cost early on and switch to local acquiring only in markets where volume makes it worthwhile.