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What Is A Merchant ID?

The payment processing ecosystem is complex. The instantaneous credit card transactions are built on an impressive number of mechanisms controlling them. Not only do these mechanisms need to be efficient, but they also need to be secure and confidential.

Part of that boils down to the accuracy in which transactions, payments and refunds are routed between merchants, customers, issuing banks, and acquiring banks — and a crucial part of that system is built on the specificity of Merchant IDs.

By attaching specific information to merchants, the payment ecosystem can reliably deliver funds to the right businesses.

What is a Merchant ID?

A merchant ID is a specific identification number attached to a business that tells the payment processing systems involved in a transaction where to send which funds.

You can think of it like an address for your business. If you don’t have a merchant ID, then the networks involved won’t know where to send your money.

Merchant IDs are as important as bank accounts and should be treated as such. You open yourself up to vulnerabilities if you widely share this number, so don’t do it unless you absolutely need to.

How to create a merchant ID for your business

You will receive a merchant identification number (MID) when you start working with a merchant services provider like Tailored Transactions.

This involves an application process that will be reviewed and approved by an underwriter. The application will require information about the business; including the types products and services being offered, sales volume, and ownership information.

Once you get your merchant ID, make sure not to lose it due to chargebacks

Once you get your merchant ID, it will remain yours for as long as you work with your merchant services provider — assuming you don’t get flagged for excessive chargebacks.

Chargebacks are a normal part of any business (and even more so in retail and other consumer businesses), but an abnormally high number of chargebacks is usually a sign of a business taking advantage of consumers, which is why you can lose your right to transact if you consistently receive a high number of chargebacks.

Your MSP can also freeze your merchant account or funds depending on your transaction history. This can be pretty damning — essentially disabling your ability to accept credit carrd transactions.

Chargebacks are a whole topic into itself, but there are a lot of ways to prevent chargebacks, including:

  • Geolocation verification
  • Address Verification Systems (AVS)
  • CVV Verification
  • 3-D Secure (especially the latest version released in 2018).
  • Get a designated chargeback representative working for your business (we provide chargeback assistance for free for all of our clients).

Learn more about other strategies for fighting back against chargebacks HERE

If you switch providers due to bad service or for any other reason besides getting flagged, you’ll receive a new Merchant ID from your new processor.

Where to find your existing merchant ID

Merchant IDs are not public information and cannot be searched as such. So if you’re not involved with the business you’re trying to find, there’s no merchant ID number lookup system you can take advantage of. Again, these numbers are private and used for routing money, sort of like a bank account. You don’t want these numbers to get released publicly.

MIDs are typically 15 numbers long unless your processor does things differently, and you can find them a few different ways:

You can find it on your merchant statement

Check out the top right of your merchant statement from your MSP. If you don’t see a 15-digit number that looks like it, get a hold of your merchant services provider or processor and ask them.

You can sometimes find it on your terminal

Sometimes MSPs or processors will put the ID on your terminal. Check the sides and bottoms for some indicator.

You can find it on your bank statement

Your statement should have some version of your MID (sometimes an abbreviated version) where the credits and debits from our processors are. These typically start with BTOT or MTOT.

Other types of IDs you should know about

MIDs aren’t the only types of IDs found in the payment processing world. Again, these IDs work like a hierarchy of specificity for the system itself. By including network and terminal IDs, a system can determine the business, the specific branch of a business, the terminal, and the network of a specific transaction.

TIDs - IDs of a specific terminal

GIDs - Specific network IDs for merchants

MIDs, TIDs, and GIDs are all the IDs you need to keep track of, we promise!

Have questions about the information in this blog? Would you like to receive a free rate quote for your credit card processing?

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