Merchant identification number (MID)
What is a merchant identification number?
A merchant identification number, also known as MID, is a unique set of characters that identifies the business to a payment processing system. The merchant ID number is usually issued to a company by an acquiring bank. It acts as a kind of address for the business, indicating where payments should be received.
Regardless of the field of activity, every merchant needs a merchant account to accept payments from customers legally. When opening a merchant account, each company is assigned a unique merchant ID number, which will identify their business bank account among thousands of similar ones.
How does it work?
The merchant identification number ensures that the money is sent to the correct merchant account upon processing. When a transaction is processed, along with payment information, the merchant ID number is also shared with all parties involved for verification and payment routing. After the issuing bank confirms the payment, the funds will be transferred to your merchant account. Thus, without a merchant identification number, the money will have no destination, and the payment system will not be able to process the payment correctly.
How to get a merchant identification number?
Any business that accepts online card payments and owns a merchant account automatically receives a merchant ID number. However, if you’re using a third party payment processor like a payment aggregator to process your payments, you will probably not be provided with a unique MID as in most cases they use their own merchant accounts to process your transactions.
If you’re determined to obtain a merchant identification number, you should find out how the process usually works. Of course, it all starts with documents and verification of your business. Required documentation may include the taxpayer identification number (TIN), due diligence, KYC (Know Your Customer), and other relevant information. The list of required documents may vary depending on the acquirer.
Once your company has been verified and assigned a merchant ID number, you will be able to receive funds seamlessly into your merchant account.
Can I have multiple merchant IDs?
Short answer: it is possible to have multiple merchant identification numbers. While a single merchant ID number is enough to cover most business needs, some companies need to diversify their offering. For example, if you need a POS terminal, using the TID, another unique number that identifies the payment acceptance device, is a great solution. Moreover, if you have several POS terminals, several TIDs can be easily grouped under one merchant ID number.
But who really needs multiple merchant IDs? Merchants who open several MIDs typically do omni-channel sales. These businesses include restaurants, hotels, chain stores, and others. It’s much more convenient to have a separate merchant identification number for each source of income than to collect everything under one roof.
Having several merchant ID numbers is not only a great opportunity to conveniently track income, but also a smart way to diversify risks. For example, if one of your merchant accounts is frozen for some reason, you will not lose everything at once.
Where can I find my merchant ID number?
Your merchant identification number is private information that cannot be found in public sources. It is exchanged strictly between the business, the payment processor, and the banks involved in the processing. However, there are still places where you can see your merchant ID number. Among them:
- The 15-digit code located in the upper right corner of the merchant’s monthly statement
- In a bank statement, when transferring funds from a merchant account to a bank account
- On a payment terminal, except for the terminal ID
- On an agreement with your payment processor/acquirer
Is it possible to lose my merchant ID number?
There is no way to be 100% sure that your merchant ID number won’t be revoked. This can happen for various reasons, but the result will be the same — you will no longer be able to access your merchant identification number. The most common reason for a MID suspension is many chargebacks, putting your business in a high-risk category. Also, the merchant ID can be revoked if suspicious or fraudulent activities are detected on it.
Here are a few tips to help minimise the risk of losing your merchant identification number:
- Implement 3D Secure
- Request a CVV/CVC code with every transaction
- Use two-factor verification
If you need qualified assistance in obtaining a merchant identification number and setting up acceptance of various payment methods, we at Corefy will be happy to help. Get in touch with us to find out more.
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