Why do you need one Merchant ID Number?

Hundreds of millions of payment card transactions are processed daily by banks and card networks. Every merchant has a distinct identity known as their Merchant Identification Number, or MID, which serves as their physical address in the world of payments. What does your Merchant Identification Number mean and why does every merchant need to have one ? Let’s find the answer in the writing below.

Things about Merchant ID Numbers

1. What is a Merchant ID?

1.1. Definition

A merchant ID, also known as a MID, is an exclusive identifying number assigned to a company as a merchant by the payment processor and used to identify your merchant bank account when a customer makes a credit or debit card purchase. It can be viewed as your company's address. The networks involved won't be able to send your money anywhere without a merchant ID.

When a merchant communicates with their processor and other parties, the MID (merchant ID) can assist in identifying them. The funds would have no destination if a MID was not connected to a transaction. The money could not be sent to you properly by the bank.

For example: Merchant service providers will categorize firms based on their type, with classifications including:

• Ecommerce
• Food & Beverage
• Retail
• Hotel
• Airline
• Mail Order

KEY TAKEAWAYS:

• Your payment processing provider will provide you a merchant identification number (MID), which is a special identity code.
• When a customer uses their credit or debit card to make a purchase, your company is specifically identified by this merchant ID number code.
• It basically verifies the legitimacy of your business to the customer’s card issuer.
• With merchant ID in place, it will be easier to transfer money from the customer's bank account to the merchant's bank account.

Merchant ID Definition

1.2. Why does it matter?

Even if you all use the same payment gateway, your merchant ID number will enable your payment processor to determine which transactions originated from which business. During e-commerce transactions, your merchant ID number will also be utilized to distinguish across several locations of the same company.

You are required to have a merchant ID number in order to take card payments. It is a prerequisite. Without it, your merchant account cannot accept payments. Therefore, once you've been set up, you need to make sure that you get a merchant ID number from your payment processing supplier.

Your merchant ID should be kept confidential , which is possibly the most critical thing to know. Your company may be labeled as "high-risk" if fraud results in chargebacks, which is frequently brought on by "friendly" fraud.

2. How Does a Merchant ID Work?

2.1. Merchant ID Payment Processing?

The merchant identification number ensures that, after processing, the funds are transferred to the appropriate merchant account. The merchant ID number is distributed to all parties throughout the processing of a transaction together with payment details for verification and payment routing.

The money will be paid to your merchant account after the issuing bank approves the payment.

Without a merchant identification number, the funds will therefore have nowhere to go and the payment system will be unable to properly execute the transaction.

2.2. Do All Businesses Need A Merchant ID?

It depends.

Once they set up a merchant account, every business that accepts credit and debit cards (both online and offline) receives a merchant account ID from their payment service provider. Every merchant account has a single or multiple merchant ID numbers depending on their business models.

Example 1:

Your online business only runs in the domestic market, you just need a merchant account with one merchant identification number.

Example 2:

You have multiple websites for different regional markets, each business channel would have a distinct merchant identification number (MID). However, they are all under the same merchant account ID (same merchant account) because they belong to one business.

When a customer uses their credit or debit card to make a purchase on your online store website, your company is specifically identified by this code. In essence, it gives businesses the ability to securely handle credit or debit card payments through their merchant accounts while also establishing your company's credibility with the customer's card issuer.

On the other hand, there are many small businesses or sole traders who mainly accept purchases in cash or cheques that would not need a merchant ID.

In addition, A merchant account holder might not have a MID in some circumstances. Most significantly, since these businesses have a different business model, if you work with a third-party credit card processor, you won't have a MID. These aggregators just utilize the client's name or email address to identify them and process all of their transactions using a single MID.

Every business needs a merchant Id

3. Why You Should Know Your Merchant ID Number

3.1. Reasons

• In order to take credit card payments, a merchant ID is required.
• It aids in the legal integration of your company into the payment ecosystem for the secure transfer of payments.
• For simple business identification, cultivate confidence by issuing and acquiring banks.
• To dispute a transaction or obtain more information from a merchant services provider, the processing bank, and the payment gateway provider.

3.2. How To Look Up Your Merchant ID Number?

Merchant IDs cannot be found as public data because they are private information. Therefore, you cannot use the merchant ID number lookup system if you are not associated with the company you are looking for. These are private numbers that are utilized for money routing—much like a bank account. You don't want the public to learn about these figures.

MIDs can be located in a few different places and are normally 15 numbers long, unless your processor operates otherwise.

On your merchant statement: Verify the upper right corner of your MSP(1)'s merchant statement. Contact your processor or merchant services provider and ask them if you can't find a similar 15-digit number.

On your terminal: The ID may occasionally be displayed on your interface by MSPs or processors. Look for any indicators along the sides and bottoms.

On your bank statement: Your MID should appear on your bill somewhere, perhaps in an abbreviated form, along with the credits and debits from our processors. BTOT(2) or MTOT(3) is the usual initials for these.

By calling your merchant services provider: if you're having trouble finding your merchant identification number, you can get in touch with the relationship manager who helped you get it!

Through Google Pay: When merchants set up a payments profile, Google assigns it a unique numeric code called a Merchant ID. You cannot change this number.

To find your Merchant ID follow these steps:

• Sign in to your payments profile.
• At the top, click Settings.
• Find "Public merchant profile," then find your merchant ID.

It is unquestionably necessary to have your own merchant ID and engage with an authorized merchant services provider if you have been operating a successful business for a while, have many locations, or both. They'll be able to equip your company with the proper processes and charge & fee structures to help you save money while giving your clients a better experience.

(1)MSP: Managed service provider

(2)BTOT: Banking Total

(3)MTOT: Merchant Total

3.3. Can A Merchant Have More Than One MID For Credit Card Processing?

Yes, they can.

The biggest advantage for businesses who choose to have numerous merchant accounts is that the risk is divided between two or three acquiring banks.

Merchants can evenly split their sales volume between two or three accounts when they have several merchant accounts, and the same is true for chargebacks. Your chargeback percentage for each account will be lower and your danger of losing your credit card processing services will be reduced if you spread out your chargebacks.

In addition to offering a terrific opportunity to simply track profits, having multiple merchant ID numbers is a wise approach to spread out the risks.For instance, you won't lose everything at once if one of your merchant accounts is frozen for some reason.

Reasons why a merchant should have more than one MID.

4. How do I get a Merchant ID Number?

4.1. How Do You Get A MID For Payment Processing?

Note: If you ever switch payment processor, you’ll be issued with a new MID.

4.2. Other types of IDs you should know about

There are more ID kinds besides MID that are used in the realm of payment processing. Once more, for the system as a whole, these IDs function like a hierarchy of specificity.

A system can identify the company, a specific branch of a company, the terminal, and the network of a particular transaction by adding network and terminal IDs.

• TIDs - IDs of a specific terminal.
• GIDs - Specific network IDs for merchants.

There are only three IDs you need to remember: MIDs, TIDs, and GIDs.

4.3. Difference between Merchant ID Number vs Merchant account

KEY TAKEAWAYS:

• The merchant id number is a unique identifying number provided to you by your payment processing business.
• A form of bank account called a "merchant account" enables companies to take payments in a variety of methods, usually debit or credit cards.
• Each business that accepts electronic payments is assigned a MID, whereas companies that process a variety of transactions through one gateway are assigned a Merchant Account ID.

4.4. How can I protect my Merchant Account ID ?

The biggest danger to your merchant ID is chargebacks.

Controlling chargebacks is therefore essential to safeguarding your MID and, consequently, your entire business.

To stop chargebacks brought on by criminal fraud, you have a variety of methods at your disposal, including:

• Fraud Filters
• Address Verification (AVS)
• CVV Verification
• 3-D Secure
• Geolocation
• Biometric Technology

Although it sounds simple, chargeback origins are really very challenging to pinpoint.

To protect my Merchant Account ID.

5. PayCEC - HOW TO SET UP A MERCHANT ACCOUNT ?

E-commerce operators need to have an online store in order to set up a payment gateway for a website. For online store owners to interact with their customers and payment processors with ease, a seamless payment gateway necessitates a convenient setup procedure.The website's convenient payment gateway should adhere to the following structures:

• Step 1: Enter Information
• Step 2: Document Submission
• Step 3: Integration Support
• Step 4: GO LIVE

Learn more

About the PayCEC payment gateway, you can easily integrate the payment gateway into your online shopping website. You can click here for more details.

Guide to set up a merchant account.

Read more:

• Online merchant account
• Virtual terminal merchant account services
• Ecommerce merchant account solutions
• Multi currency payment gateway & multi currency merchant account
• Difference between payment gateway and merchant account
• What is a Virtual Card and how does it work?

About PayCEC

PayCEC’s secure payment gateway was established in response to the growing need of global online businesses to accept online payments more quickly and easily. In the digital era, our payment flow has evolved to work seamlessly and effectively across all platforms and devices. We pride ourselves on combining superior technology with first-class customer service.

PayCEC’s secure payment gateway for online businesses is a truly global payments platform that not only allows customers to get paid instantly and securely, but also withdraws funds to their business accounts in various currencies.

We have created an open and secure payments ecosystem that entrepreneurs and businesses choose to securely transact with each other online and on any device. We proudly maintain the highest level of client advocacy in the industry.

PayCEC Team

• [email protected]
• +44 2032 864370
• www.paycec.com