What Is A Merchant ID Number?

Apr 8, 2024 | Payments

A merchant ID number, also known as a MID is a personal number banks use to identify your payment processing account. It’s comparable to an individual’s social security number, but in this case, it identifies a bank account.

Accepting card payments such as credit, debit, ATM, EBT, gift, company discount, etc. will require the use of a MID number.  Mainly, because it involves the transferring of money from customer to business. As of 2018, approximately 6.3 billion cards were used for purchases on a global scale. Additionally, an estimated increase of 8.4 billion debit cards will be part of the payments industry in 2023.

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Payment Processing Terms – Merchant Number

The world of payment processing is full of technical terms. Learning some basic definitions is key to increasing your knowledge about what may seem like an abstruse industry. For a beginner who is unfamiliar with this realm, understanding the ins and outs of card payments, account numbers, chargebacks, and risk levels take time and research. One key ingredient to conducting any type of business transaction as a merchant is acquiring a merchant ID number or MID.

Why Your Merchant ID Number Is Important

The merchant ID number is a specific, unique code assigned to a business by whoever processes their payments. Think of this as a location pin-drop for the company’s money. In fact, the payment processing system used in a transaction will first recognize the ID number and then send the correct funds to the location associated with that number.

Without a merchant ID, payment systems will not understand where to send the money. Furthermore, it may redirect to the wrong location. However, there is an alternative option for acquiring a MID; use a third-party payment service such as Square or PayPal. The difference between traditional, direct merchant processing (such as terminals) and third-party services often boils down to fees, exchange rate, and ease of transfer.

How Do I Get A Merchant ID Number?

While it’s not a requirement, it is always a good idea to get a merchant number for your business. Most importantly, if a business is classified as high-risk or requires an offshore account. This number directs money to the right location, so business owners can get paid. In addition, it provides a layer of security during the transaction. Best of all, setting up a merchant account is quite simple. With a few legal documents, you’ll be ready to setup your own.

How to Find your Merchant ID Number

Merchant IDOnce a company has been verified and assigned a number, best practices suggest keeping it documented in a secure location. Nine times out of ten an issue will arise that prompts the ID holder to refer back to the number- often enough to justify keeping up with it. The length of any merchant ID number usually averages 15 characters and may include letters or numbers, depending on the policies of the payment processor. In case this number gets lost or forgotten, there are a few important places to check first.

Setting Up Your MID

As per legal business requirements, prepare to offer up a tax ID number, names of the business owners, and any other necessary documentation. However, any sensitive documents between the company and the payment processor are secure. Once verified, the business falls under the category of “merchant” and receives a unique MID. Then again, it’s not uncommon for a business to want multiple ID numbers when partnering with several payment processors. In most cases, one number is usually sufficient for most companies.

Merchant Statement

Your MSP (merchant service provider) will send a statement once per month that includes all account activity for that statement cycle. Usually, the ID is in one of the top corners on the first page. It’s set-off from the rest of the document in some sort of box, along with the ID holder’s other personal information.

Merchant Number

Processing Terminal

Take a look at the card processing terminal that is used for payments. There is usually a sticker on the front or back with several numbers displayed. One is your merchant ID. Keep in mind, don’t confuse the MID with a gateway ID or a terminal ID. In contrast, these IDs are for software and electronic transmission purposes.

Bank Statement

Another place to check is on a regular, monthly bank statement. There should be credits and debits listed in the activity section from your payment processor. To find it, check for your number in the description fields of those credits or debits. It will usually start with a short series of letters and then proceed with the merchant number.