What is Merchant Identification Number (MID)? - Ikajo Glossary


Merchant Identification Number (MID)

A merchant identification code (MID) is a one-of-a-kind code implemented by the payment processor to the trader. The code is designed to recognize the merchant interacting with the processor and additional parties. The MID can be obtained by a particular merchant only after the verification of his/her business. Usually, the merchant provides the following documents to obtain MID:

  • Names of main company owners,
  • Tax Identification Number, etc.

After this step, the trader will get the number when he/she opens a special account (merchant account) within the acquiring financial institution. The merchant identification code must be always secure in order to escape the possibility of potential threats or losses.

If the vendor wants to process transactions he/she must get the MID in the bank to be able to conduct such operations. The trader can also manage multiple MIDs if he/she wants to process transactions over the multiple merchant processors.

The ID is particular to every individual vendor position and has specific authorization requirements. Moreover, the merchant ID is in charge of informing the network who should receive the payment that’s being transferred, the way the recipient should be paid, and what kind of network must take part in the payment processing activity.

In order to keep your MID safe, you have some options to choose from. Assuming that chargebacks are the biggest threat to every merchant, take the following actions:

  • Establish CVV verification,
  • Enable address verification,
  • Use fraud filters
  • Make sure you use the 3D-Secure protocol.
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