What Is A Merchant ID Number?

April 14, 2020 | Merchants | Dustin

Merchant StatementA 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’s used to identify a bank account.

Accepting card payments such as credit, debit, ATM, EBT, gift, company discount, etc. will require the use of a MID number 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 increase of 8.4 billion debit cards are expected to be added to the payment mix by the year 2023.

The world of payment processing if 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 of 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

What is a Merchant ID Number

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. 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, and it will be left in limbo or redirected 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.

While it is not required, it is always a good idea to stick with getting a merchant number- especially if a business is classified as high-risk or requires an offshore account. This number is important because it not only directs money to the right location, so business owners can get paid, but also provides a layer of security during the transaction. Setting up a merchant account is quite simple, but it does require a few legal documents to get the process rolling.

How to Find your Merchant ID Number

Once 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 Merchant ID Number

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 shared between the company and the payment processor are secure. Once verified, the business will fall under the category of “merchant” and be assigned a unique MID. It is not uncommon for a business to want multiple ID numbers when partnering with several payment processors, but 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 can be found in one of the top corners on the first page. It will be set off from the rest of the document in some sort of box, along with the ID holder’s other personal information.

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 being a merchant ID. The MID should not be confused with a gateway ID or a terminal ID; these sequences are used 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. 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.


April 14, 2020 | Merchants | Dustin