What exactly is a Merchant Indeficiation Number (MID)?
When you start accepting payments for your online shop, your brick-and-mortar store or through any other business, you will be receiving a lot of different information. One of these items is your Merchant Identification Number (MID).
When you are approved for processing payments you’ll be assigned a Merchant Identification Number (MID) by the acquirer (Bank). This MID will have all your business details attached to it, including the Merchant Category Code (MCC), average ticket size, payment description for on the customer’s credit card bill or on the receipt, and many more details.
The Merchant Category Code (MCC) is of importance as this will allow VISA and or Mastercard to see if the classification of your business is correct. For example, if during the registration process your business is allocated to VISA MCC 7641 Furniture Repair, but actually your business should be classified as VISA MCC 7995 Gambling this would have major consequences as Gambling might be prohibited in the country or state you’re registered in.
How does it work?
Because millions of businesses around the world are accepting payments, all payments that are processed need to be linked to a unique reference, which is your MID. So when you have received your MID you’ll also receive the activation key to start processing your payments, whether this is online through your shop or face to face with a terminal, the activation process stays the same.
The moment a customer makes a payment, this payment is linked to the unique transactions ID within your MID and payment processing gateway. When you receive your payment report you should receive a report per MID, so if you have for example an in-store terminal with a normal and contactless MID you should get 2 separate reports.
You might wonder why you would need 2 different MID number for the same terminal, this is because contactless transactions have a transaction limit attached to them. Each additional way of accepting payment will automatically generate a new unique MID for your business, by doing so, you’ll be able to keep track of all transactions going through each payment option.
After each period, whether this is daily, weekly, bi-weekly or monthly you’ll get a transaction report with all the transactions. The overview will include all kinds of different transactions like successful transactions, failed transactions, refunds, chargebacks, pre-authorized and authorized transactions.
Any customer dispute, refunds, double payment, a chargeback can be easily traced back to the actual time and date of when the customer or you as the merchant took a certain action.