Selling digital products: a glossary of payment, tax and licensing terms
Short definitions of the payment, tax and licensing terms you run into when you sell software, license keys, scripts and other digital products, with a line on how each one works on Skalp where it matters.
Payments
Merchant of record (MoR)
The company that legally sells the product to the buyer. Its name is on the card statement, and the tax, the invoice, refunds and chargebacks are its responsibility. Skalp is the merchant of record for every sale on Skalp and pays the seller their share. How that works.
Payment processor
The company that moves money from the buyer's card or wallet to a merchant account. If you use a processor directly, you are the seller, with the tax and dispute duties that come with it.
Payment gateway
The technical link between a checkout page and a processor. Many storefronts work as a gateway on payment accounts the seller connects, which keeps the seller as the merchant.
3D Secure
An extra check by the buyer's bank, usually a confirmation in the banking app. When a payment passes it, the liability for most fraud chargebacks moves from the merchant to the bank that issued the card.
Local payment method
A way to pay that is common in one country, such as BLIK in Poland or Pix in Brazil. These methods usually need the price in the local currency, which is why Skalp charges buyers in Poland in złoty and buyers in Brazil in reais.
Presentment currency
The currency the buyer sees and pays in. It can differ from the currency the seller sets prices in and is paid out in.
Payout
The transfer of a seller's earnings to their bank account or wallet. On Skalp you request a payout from the dashboard to a bank account in 40+ countries or to a USDT wallet.
Clearance period
The time between a sale and the moment its money can be paid out. It covers the window in which most refunds and disputes arrive. On Skalp an order clears 7 days after it completes.
Tax
VAT
Value added tax, charged on sales to consumers in the EU and many other countries. Digital products sold to EU consumers are taxed at the rate of the buyer's country. EU rates by country.
GST
Goods and services tax, the name used in Australia, New Zealand, Canada, Singapore, India and other countries for a tax that works much like VAT.
OSS (One Stop Shop)
An EU system that lets a seller register for VAT in one member state and file one quarterly return for its sales to consumers in all 27. Its non-Union scheme is for sellers based outside the EU.
Reverse charge
On a cross-border sale to a business with a valid EU VAT number, the seller charges no VAT and the buyer accounts for it in its own return.
Net and gross price
The net price is the amount before tax, and the gross price is what the buyer pays. Prices on Skalp are net, and the VAT for the buyer's country is added at checkout.
Delivery and licensing
License key
A code that unlocks software. It can be generated for each sale and checked by the software, or taken from a list of keys someone else issued. Both options on Skalp.
Key pool
A stock of keys or serials made in advance. Each sale takes the next unused one, so the same key never goes out twice.
Hardware ID (HWID) lock
Binding a license to the machines it runs on, so one key cannot be passed around. On Skalp you set a device limit per product, and the license check refuses a new machine once the limit is reached. Code examples.
Obfuscation
Rewriting code so it still runs but is hard to read or copy. Skalp can obfuscate Lua scripts at upload. Buyers download the protected build and you keep the original.
Webhook
An HTTP request that a platform sends to your server when something happens, such as a paid order. Skalp signs each one with HMAC-SHA256 so your server can check that it came from Skalp.
Idempotency key
A value sent with a request so that sending it again has no extra effect. It makes retrying after a timeout safe, for example when you charge a subscriber for usage.
API scope
A permission attached to an API key. On Skalp, a key whose only scope is licenses:validate can ship inside a desktop app, since it cannot read orders or change anything.
Disputes and risk
Chargeback
A payment reversed by the buyer's bank after the buyer disputes it. The merchant can answer with evidence and the bank decides. On Skalp, Skalp's team handles the dispute, and a lost chargeback revokes the buyer's licenses and Discord roles from that order.
Refund
Money returned to the buyer. On Skalp a full refund revokes the order's license, so the key stops passing the check.
Friendly fraud
A chargeback filed by a real buyer who did get the product, for example by claiming they never made the payment.
Blacklist and whitelist
Rules that block buyers by email, IP address, country or network, and rules that exempt trusted buyers from those blocks. Skalp stores have both.
Questions people ask
What is the difference between a merchant of record and a payment processor?
A processor moves the money, and the sale and its tax and dispute duties stay with you. A merchant of record makes the sale itself and takes those duties on.
Does a merchant of record handle my income tax?
No. It handles the sales tax on each order. Tax on the income you receive in payouts follows the rules of your own country.