A merchant identification number (MID) is a one-of-a-kind identifier provided by your payment processing provider.
When a consumer uses a credit or debit card, this code uniquely identifies you as a business.
It simply allows retailers to securely take card payments and process transactions through their merchant account while also verifying your business’s identity to the customer’s card issuer.
With everything in place, monies may be sent from the customer’s bank account to the merchant’s bank account.
What is a merchant identification number?
So, how can you obtain a MID code for your company?
When you create a merchant account with an acquiring bank, you usually receive your merchant ID number. After that, your payment processing provider may assist you with opening your merchant account and issuing your firm with a unique MID. And there you have it!
Just keep in mind that if you change payment processors, you’ll be given a new MID (so make a note of it if it does change).
What is the purpose of obtaining a merchant number?
A merchant number is required to accept card payments. It’s a legal necessity. It is required to accept transactions through your merchant account.
As a result, after you’ve been approved, you must receive a merchant number from your payment processing provider.
What is the distinction between a merchant identification number and a merchant account identification number?
It is reasonable that there is some misunderstanding between merchant identification numbers and merchant account IDs.
The important thing to understand is that they are completely different.
Once a merchant account is established, any business that takes card payments (both online and offline) receives a merchant account ID from their supplier. Businesses, on the other hand, require a merchant identity number.
Assume you have an internet firm with many websites or online branches. Because it is the same firm, each channel would have its own unique merchant identification number, but they would all be under the same merchant account ID (and same merchant account).
The same is true for offline companies with several locations, such as stores, restaurants, and hotel chains.
Where can you discover your current merchant ID?
Maybe you already have a merchant ID. As previously said, if you ever alter or get a new MID code, it’s a good idea to maintain a record of it somewhere convenient.
However, if you haven’t done so, don’t worry. There’s no need to go through a mountain of papers.
Your MID code may normally be found in one of three places:
- Your merchant statement, which you should get monthly from your supplier.
- Your card terminal – if you’re familiar with the software on your terminal, you might be able to discover it digitally displayed there.
- Your bank statement – is less likely, but always worth a look.
If everything else fails, you might always contact your service provider.
Call them and they should be able to tell you your merchant number right away.
How to Secure Your Merchant Number?
Chargebacks are one particular risk against which you should secure your merchant ID. Chargebacks are perhaps the most inconvenient for online businesses, owing to the heightened risk of fraud and disputed transactions connected with online payments.
In fact, if your firm receives a significant number of complaints, some providers may freeze or even withdraw your merchant identity number entirely.
However, there are several things that online firms may take to avoid chargebacks and safeguard their merchant identification number.
The three most important are as follows:
- Address Verification (AVS) enables you to decline/review online purchases if the billing and delivery addresses do not match.
- Card Verification Value (CVV) – this is a fraud filter that determines if the real CVV number on the card and the one entered at the online checkout match.
- 3D Secure – this is the customer’s card issuer’s authentication window. Before users can proceed with the online checkout, they must first create a password.
Can I have several merchant IDs?
Yes, your company can have several merchant identification numbers.
This relates to the previous discussion about merchant ID number vs merchant account ID. If you are a multi-channel firm (i.e. you have many sales channels, such as multiple websites or locations), you can receive a merchant ID code for each income source.
In fact, it’s good practice and largely regarded as a prudent thing to do in general. Not least because it makes it easier to segregate and identify where different kinds of money contribute to the firm.
Different kinds of identification numbers
There are a handful of significant instances of different forms of identification numbers to be aware of.
- Terminal Identification Number (TID) – a unique ID code assigned to each card terminal hired by your company.
- Gateway Identification Number (GID) – the unique network login code used by merchants.
You should maintain a note of your GID code somewhere secure, but if you miss it for any reason, you may usually phone your payment processing provider to retrieve it.
- How to Start an Ecommerce Business in 2022 – A Complete Guide
- Complete Guide About Merchant Acquirer and His Fees
- eCheck Payment Processing: Guide to Understanding How Electronic Checks Work
- How to Increase Conversion Rate in Your WooCommerce Store
- 10 Small Business Growth Strategies to Implement in 2022