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Merchant numbers play a key role in processing card payments, assigning transactions to businesses and ensuring funds reach the right account.
There was a time where every business accepting card payments needed a merchant number but this isn’t always the case in today’s complex world of payments.
In this article, we clarify whether your business needs a merchant number to accept card payments and explain how to create one or find your merchant ID, if you already have one.
A merchant number or merchant identification number (MID) is a unique numerical identifier assigned to your business by your payment processing provider.
It is used to identify your business throughout the card payment processing, which involves several tiers and data exchanges between merchants, acquirers, issuers and, sometimes, third-party partners.
Your MID attributes this transaction data to your merchant account at each step of the process. Simply put, without a merchant number, you can’t get paid.
Most businesses will only have one merchant ID number. However, some enterprises with multiple merchant accounts will have a unique number for each account. For example, a company like IKEA that has retail stores, an online store and a restaurant business will have a merchant number for each of these.
If you change merchant account providers for any reason, you’ll receive a new merchant ID number.
If you have a merchant account, then you need an MID to process card payments using this account. This unique identifier plays a crucial role in the transactional data exchange between merchant account providers, your acquiring bank, customers’ card issuers and any third-party services being used (eg: a payment gateway).
That being said, the card processing industry has changed a lot in recent years and you don’t necessarily need a merchant account of your own to take card payments anymore.
The industry now includes a growing number of third-party processes and aggregators, such as Square, Stripe and PayPal. If you use any of these to process card payments, then your business doesn’t have its own merchant account. Instead, these companies use their own large merchant accounts to process payments for all of their customers.
In this case, your business doesn’t have a merchant account and, as a result, no merchant ID number.
If you open an account with a merchant account provider, you’ll receive a merchant identification number (MID) but you’ll also be given a merchant account number (or merchant account ID). It’s important to note the difference between the two. Everything we’ve discussed in this article refers to MIDs, which are used to identify you as the merchant associated with your account.
If your business has multiple branches (different brands, different online stores, etc.) each channel can be assigned its own merchant identification number (MID). However, every MID assigned to you by the same merchant account provider will be given to you under the same merchant account ID.
For example, Opayo offers three types of merchant accounts and each one comes with a different type of MID:
Other merchant account providers use different numbering systems and, if you need multiple accounts, you’ll often find the best rates for each purpose by using different providers. For the best rates on each type of merchant account, fill out this form for a custom quote.
Also, keep in mind that you may be assigned other ID numbers from payment service providers but these shouldn’t be confused with merchant IDs (MIDs).
You’ll receive a merchant identification number when you open a merchant account with an acquiring bank, a payment service provider (PSP). This involves an application and vetting process that requires you to submit business information and documentation.
If you apply for an account directly with an acquiring bank, the application criteria tend to be more strict than applying through a partner payment service provider. So, if you have problems securing a merchant account through an acquiring bank, you may find it easier to secure one through a PSP that partners with merchant account providers.
For a more in-depth overview of your options for securing a merchant account, take a look at our guide: What Is A Merchant Account?
Find Your Existing Merchant Number
If you already have a merchant account, finding your MID is relatively straightforward. You can normally find your merchant number in the following locations:
If you can’t find your merchant number in any of the locations listed above, call your merchant account provider to request your MID and keep it documented somewhere safe for future access.
Card payment processing is a multi-layered procedure with several companies fulfilling different roles, some of which may be outsourced to third-party entities. This requires a data exchange at every step of payment processing. Your merchant number is the code that keeps the transaction tied to your business.
If you experience issues during the payment process, you’ll need your MID for the relevant party to identify your business account and resolve the problem.
For example, if you notice that funds from certain transactions (eg: payments in Euros) are taking longer to reach your account than expected, you’ll need to contact your acquiring bank to investigate the delay. Your MID helps the bank identify your account and this is especially important if your merchant account provider is an independent contractor that partners with acquiring banks on your behalf.
If you have a merchant account, yes. You need a merchant ID number to receive funds from card payments and help your payment service providers identify your business account. Normally, a merchant account provider will assign a merchant number to you.
Your MID should be located on official documentation, including the contract signed with your merchant account provider and monthly statements.
Yes, if you have multiple merchant accounts for different business channels (online, offline, etc.) or lines of business (retail, hospitality, etc.) you should have a merchant ID for each.
Keep chargebacks as low as possible by taking the necessary security steps, namely Address Verification (AVS), Card Verification Value (CVV) and 3D Secure authentication to protect online card payments.
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