What’s a Merchant ID Number? (and How to Get One)

A merchant identification number (MID) is a unique code that helps identify a merchant account. It is generated by the processor after the account has been created and is used to complete different actions at various stages throughout the payment processing lifecycle. 

Like a phone number that routes calls to your individual phone or an email address that directs messages to your personal inbox, a MID ensures funds are deposited into your account and no one else’s. It also prevents you from receiving refunds and chargebacks that don’t belong to you. 

Want to know more about MIDs? Check out these seven frequently asked questions and our detailed responses.

Why do merchants need a MID?

A merchant account is a type of bank account. It is where your business’s revenue is deposited. If you want to receive payments from your customers for the goods or services you sell, you’ll need a merchant account. And if you have a merchant account, you’ll need a MID. 

A MID is a unique identifier. It helps everyone involved in the payment processing workflow identify your merchant account. 

Only your account uses that unique combination of numbers and letters. This uniqueness is important. It ensures that the credits and debits made to your merchant account are accurate. 

How do merchants get a MID?

A MID is generated and shared with a merchant after the account has been created. The process works like this:

  1. You apply for a merchant account. 
  2. The processor reviews your application (a process called underwriting). 
  3. The processor presents you with the proposed terms and conditions (fees, reserve, etc.)
  4. You sign the agreement. 
  5. Your account is created. 
  6. A merchant account ID (MID) is generated. 
  7. The MID is shared with you. 
  8. You begin processing credit and debit card transactions. 

It’s important to note that a MID is only provided after the merchant account application has been approved. If your application is denied, you won’t receive a MID. 

If your request is declined, ask why you were turned down. Find out what you need to do in order to be approved. 

How can merchants find their merchant ID number?

Your MID is used for a variety of different things, and you’ll probably need to enter it in a couple different platforms such as your CRM or order management system, your gateway, your fraud filter, and your chargeback management technology. 

Since MIDs are usually long strings of numbers and/or letters, they are hard to memorize. You’ll probably need to look yours up when it comes time to use it. 

There are a couple different places you can find your MID:

  • When the processor approved your merchant account application, you probably received a VAR (value-added reseller) sheet. Along with other account details, the VAR sheet shares your MID. (A VAR sheet is sometimes referred to as a tear sheet or parameter sheet.)
  • A merchant account agreement typically lists the MID.  
  • Your MID is printed on your monthly merchant account statements.
  • If your processor has an online account portal, your MID is probably included with other account information. 

What other payment processing IDs are there?

MIDs are just one of many different identifiers used throughout the payment processing workflow. And unfortunately — like MIDs — many identifiers are confusing acronyms!

Here are some of the other identifiers you might encounter:

  • Terminal ID – This unique code helps you identify the point-of-sale (POS) terminal used to process the transaction. 
  • Gateway ID – Also referred to as a CRM account ID, this is a unique name or number assigned by the CRM or order management system to identify the merchant account used to process the payment. 
  • Order ID – Your CRM or order management system assigns a unique identifier to each order you process. 
  • CRM ID – An identifier can help you determine which CRM was used to process the payment (if you have more than one CRM or order management system).
  • ARN – Your acquirer assigns a unique identifier, called the acquirer reference number, to each transaction. 
  • BIN – Bank identification numbers are used to identify financial institutions. Both issuers and acquirers have them (issuer BINs are the first six digits on the payment cards issued by that bank). 
  • MCC – Your merchant category code identifies the type of goods or services you sell.

Can merchants have multiple MIDs?

Some merchants only need one MID; other merchants require several MIDs. 

Merchant accounts have restrictions on the types of transactions that can and can’t be processed (for example, ecommerce or in-person, but not both). They also have limits on transaction and sale volumes (for example, a maximum of $250,000 a month). 

That means that if your business grows and evolves over time, it may need different MIDs to handle the different processing situations. 

For example, making any of the following changes to your business could mean you need to add more MIDs:

  • Your sales volume increases significantly
  • You expand your business model (open an ecommerce store, add a restaurant to your t-shirt shop, etc.)
  • You switch from domestic to international sales

More MIDs offer additional opportunities, but they also present greater management challenges. 

Can merchants lose their MID?

It is possible to lose your MID. 

However, you technically don’t lose your MID; what you lose is your ability to process payments. If your processor decides to revoke your processing privileges, your merchant account will be closed and its identification number will eventually cease to exist. 

There are several reasons why you might lose your ability to process payments. For example, your account will be terminated if your processor discovers you are laundering money or selling prohibited items. 

But the most common reason for merchant account closures is chargebacks. 

The card brands have set risk thresholds and carefully monitor chargeback activity. If your chargeback counts become excessive and you breach the thresholds — or your processor suspects you might — your processing privileges can be revoked. 

How can merchants protect their MIDs?

Merchant accounts are valuable assets. If you’re fortunate enough to obtain one, you should do all you can to keep it. 

Here are some of the most important things you’ll want to do to protect your payment processing privileges. 

  • Abide by the terms of your contract. Don’t use your account for unauthorized activity (for example, selling different products or services, changing sales methods, etc.)
  • Be accommodating. If your processor asks you to do certain things, be sure to live up to your promises.
  • Understand and follow all card brand rules. This is especially important if you engage in heavily-regulated activities such as free trials
  • Prevent chargebacks. Keep your perceived risk as low as possible. If activity starts to increase, put a plan in place to quickly get the situation under control. 

The most common reason for losing a MID is excessive chargebacks. So it’s this last task — chargeback prevention — that you’ll want to pay extra attention to. 

We have several articles that outline chargeback prevention strategies in great detail. In general, we suggest merchants create a multi-layer strategy that uses a combination of some or all of the following tools: 

Let Midigator Help Protect Your MID

A merchant account plays a vital role in your business’s ability to turn a profit. You can’t afford to lose one. And you need to be approved for more as your business grows. 

That’s why it is important to protect your MIDs and your reputation. Don’t let chargebacks negatively influence your earning potential or your processor’s opinion of you. 

Midigator® can help. 

We believe the challenge of running a business should be delivering great products or services, not managing payment risk. We remove the complexity of payment disputes so you can focus on growing your business without restrictions. 

Contact Midigator today. We’ll make chargeback prevention easy so you can protect your MIDs and maximize your earning potential.

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