> ## Documentation Index
> Fetch the complete documentation index at: https://docs.suby.fi/llms.txt
> Use this file to discover all available pages before exploring further.

# Merchant of Record vs PayFac: Dispute Liability

> Suby offers two settlement modes with the same thresholds and fees in both, but very different risk models for who controls disputes and what's at stake.

Suby offers two ways to process card payments. The alert / reserve / termination thresholds and the \$25 (Visa), \$50 (Mastercard) dispute fees from [Suby's Dispute Thresholds](/education/dispute-thresholds) are the same in both. What differs is who's exposed, and who controls the response.

## Merchant of Record (MoR)

Suby is the **legal seller** on the card statement and the invoice. Every dispute is filed against **Suby's** merchant account, not yours, and it lands in the same ratio Suby reports to Visa and Mastercard, a ratio shared across **every merchant on MoR**, not just you.

* Your 0.7 / 0.9 / 1.0% thresholds are tracked at your account level, but they exist to protect the **shared MoR pool**: one merchant running hot puts every other MoR merchant's processing at risk.
* Suby uses **auto-refund on flagged transactions**: payments that look likely to be disputed (fraud signals, pre-dispute alerts, repeat "friendly fraud" patterns) are refunded automatically before the cardholder escalates, so the transaction never becomes a chargeback at all.
* Suby, not you, decides how a dispute is represented. You get compliance handled for you, in exchange for less discretion over individual cases.

## PayFac

In PayFac mode you're boarded as your own **sub-merchant** with an identity of your own inside Suby's payment-facilitation relationship with its banking partners. You control how disputes are handled: your refund policy, your evidence and representment strategy.

* Your ratio is tracked **at your own sub-merchant level**, directly with the underlying processing/banking partner. It isn't pooled with other Suby merchants the way MoR is.
* If you cross the same 1.0% line, the **partner can flag, restrict, or terminate your specific sub-merchant** independently of everyone else on Suby.
* Because that flag sits with the partner directly, an excessive ratio here risks your standing with that specific banking relationship, and can make future approvals with similar partners harder.

## At a glance

|                                       | Merchant of Record                               | PayFac                                                  |
| ------------------------------------- | ------------------------------------------------ | ------------------------------------------------------- |
| Legal seller of record                | Suby                                             | You                                                     |
| Alert / reserve / termination         | 0.7% / 0.9% / 1.0%                               | 0.7% / 0.9% / 1.0%                                      |
| Dispute fee                           | \$25 Visa - \$50 Mastercard                      | \$25 Visa - \$50 Mastercard                             |
| Ratio measured against                | Suby's pooled MoR portfolio                      | Your individual sub-merchant account                    |
| Who controls dispute handling         | Suby (automatic, deliberately strict)            | You                                                     |
| Auto-refund to prevent disputes       | Yes, applied proactively                         | Optional / configurable by you                          |
| What's at risk if you exceed the line | Your access to MoR (to protect the shared pool)  | Your standing with the specific banking partner         |
| Best fit for                          | Merchants who want dispute risk handled for them | Merchants who want direct control over dispute strategy |