Merchant ID (MID) Explained

Merchant ID

If you want your business to accept credit and debit card payments, you’ll have to follow a number of steps. These include getting a business bank account and a great card machine to process the payments.

But you’ll also need a merchant ID (MID), which is a 15-digit code that lets you process card payments and ensure the money reaches your account properly.

In this guide, we take a closer look at MIDs and go over how they work, how to get one, why they’re important, and more.

What Is a Merchant ID Number?

An MID is a unique number that enables credit and debit card transaction processing. It serves as an ‘address’ for business payments that lets banks and credit card processors know where funds from customers should be going.

The number ensures your business (and merchant account) can always be identified during the card payment process, which is a complex data exchange between several partners. Your MID is also a piece of data meant to be kept private, so be careful. If not, fraud could occur that costs you financially and ruins your reputation.

How Merchant ID Numbers Work

MIDs work by acting as identification for your merchant account. When a customer makes a purchase, it’s the MID that is responsible for telling the different parties within the credit card processing procedure where the payments should go.

Once a purchase is made, the MID is sent alongside the transaction details to the payment processor and/or customer’s bank to ensure there’s no confusion about where funds are sent.

Why Do Businesses Need a Merchant ID?

Businesses need a merchant ID in order to process card payments properly. Without one, payment processors and other parties would have no way of knowing where funds should be sent. It’s also valuable for identifying your business/merchant account and confirming its legitimacy in case there’s ever any question.

However, if your business uses certain full-service payment processing providers, such as Stripe or Square, you may not be given an MID directly. The company uses a large merchant account to receive funds and send payments to the proper places, but you as a customer aren’t required to deal with them individually.

These companies offer the same functionality of a merchant account to its users, without them having to open and worry about their own.

How To Get a Merchant ID Number for Your Business

The question of ‘how do I get a merchant ID number’ is a straightforward one to answer. All you need to do is open a merchant account with a bank or payment processor and you’ll automatically be given an MID once the account is created.

The information you need to get started is similar to other types of business and/or bank accounts. Exact requirements vary from company to company, but you’ll generally have to provide things like:

  • Proof your business is registered
  • Financial statements
  • Information about the owners of the business
  • Licences and/or permits (if applicable)
  • Tax information
  • A description of your business or a business plan

After you apply for an account and provide the necessary supporting documents, the application is reviewed. Once it has gone through a review and is approved, your account is created and an MID will be generated and shared with you.

However, once you get an MID doesn’t mean you’ll automatically have one forever. They can be revoked for things like fraudulent activity or having frequent chargebacks. If this happens, it can be devastating for your business.

How To Find Your Existing Merchant ID Number

If you’re wondering ‘how do I look up a merchant ID’, it’s not as easy as searching for it on Google. MIDs aren’t publicly available for the sake of security, but there are a few ways to see yours. Some of the methods include:

  • Looking at your merchant account statement
  • Reaching out to your merchant account provider
  • Inspecting your payment processing hardware
  • Checking your bank account

Can You Have More Than One Merchant ID Number?

While many companies will be fine with one merchant ID, it’s possible to have more than one for a business. It’s helpful for organising finances and keeping things clear, especially if your business has various segments.

For example, companies that have physical stores as well as an online store can benefit from multiple MIDs. You could have a traditional MID for in-person sales and an internet merchant account to handle online transactions.

Multiple merchant accounts can help companies gain insights into the performance of each sector and better track transactions.

Businesses with different revenue streams may choose to use more than one MID to keep the finances from each area separate, even though they’re the same business. An example of this could be an arcade that also serves food and drink.

If you want more than one merchant account for your business, just ask your bank or payment provider to set it up.

Can You Use One Merchant ID for Multiple Businesses?

So you can use multiple MIDs for a single business, but is the opposite true? The answer is no. Those who have a variety of individual businesses with different merchant accounts need to have a unique MID for each one.

If you had a single merchant ID for numerous businesses, keeping track of where payments come from, where they go, and what they were for could be a nightmare. Dealing with chargebacks and disputes would also be a major headache.

Next Steps

If you want to accept credit and debit card payments, getting an MID is an important step. It ensures you’re paid properly and that the money from your customers can eventually reach your bank account. The process for getting an MID is straightforward and will happen automatically after opening a merchant account, so be sure to do that first.

You can use multiple MIDs for a single business, for example, if you have a physical store and and online store. But you can’t use the same MID for multiple businesses. Remember also that you need to keep your MID private so that it can’t be used for fraudulent purposes.

Is a merchant ID the same as a business account?
When it comes to a merchant account vs a business account, many believe they’re the same thing, but that’s not true. A business account is where company funds are held, whereas a merchant account only exists to accept payments on behalf of your business. Your merchant account is like a bridge between a customer payment and your business bank account.
Where do you find your merchant ID?
To find your merchant ID number, you can look at your merchant account statement, check your bank account, or inspect your payment processing terminal. If you can’t find it using any of these methods, you should reach out to your merchant account provider.

They’re not publicly available for security reasons and can’t be discovered with a Google search.

Who provides my business with a merchant ID?
The bank, financial institution, or payment processor you open your merchant account with is the company that provides you with the merchant ID. It’s a straightforward process and after your application and business verification are successful, the company will generate an MID for you and share it. You won’t have to reach out and request one.
Written by:
Kale has over five years of experience writing on a broad range of business-related topics, including business technology, software, automation, human resources, employee engagement, and finance. He also holds a BSc in Sociology with a Minor in E-commerce and a certificate in Business Administration. Kale's easy-to-digest, research-driven articles stem from his passion for sharing knowledge with readers, and his bylined work has been published on Yahoo, BestMoney and a selection of SaaS sites.