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Payment processing terms you need to know: merchant ID numbers

If you’re a new high risk business owner, you might be curious about merchant identification numbers (also referred to as MIDs). Basically, a merchant ID is a specific code assigned to you when you get your merchant account from an acquiring bank or processor. However, understanding MIDs involves much more than a simple definition.

At E-Commerce 4 IM, we specialize in helping high risk businesses with their credit card processing needs. We do this by helping site owners with their high risk merchant account setups, chargeback mitigation, and other elements that come with processing credit cards online. With our extensive experience in the industry, we’ve gained some valuable knowledge and tools that can help with all your merchant ID issues and questions. This is why we’ve decided to give some quick tips on merchant ID numbers – what they are, how they work, and best of all, how they can work for you.

What are merchant ID numbers?

As we’ve mentioned, merchant ID numbers are (MID’s) simply account numbers that identify you and your business during the transaction process. Any given MID refers to one specific merchant account. Their purpose is simply to help track, manage, and communicate transactions between the merchant account, payment gateway, and customer’s bank.

The question that’s often raised at this point is: can you have more than one MID? You can indeed, however, that’s not the question you should be asking yourself. The real question whether you need more than one merchant account or MID. There are multiple elements that come into play here which we will touch upon a little later.

Do you always need a merchant ID number to accept credit card payments?

While you technically need to have a MID in order to process credit card payments, there are ways around having to have your own. For example, if you use payment services like Stripe or PayPal, you aren’t actually using a formal merchant account with a dedicated MID. However, if you’re a high risk site owner, many internet marketing experts would strongly discourage you from using either of these services. They aren’t always well equipped for dealing with the particulars that come with the territory of high risk sales.

The difference between MID and TID

Regardless of whether you accept online payments or run a brick and mortar store (or both), you’ll need to have a merchant account in place. A MID is a crucial part of how credit card processing works. However, you can also have multiple points of sale. For example, if you have more than one card reader (credit card terminal) and accept payments online you’ll have different terminal identification numbers for each method (these are all called TID’s). This will allow you to track payments and revenue streams through the different terminals – virtual or physical.

You can have many different TID’s associated with any one merchant account. In other words, if you predominantly sell one type of product, you might be all set with only one merchant account, even with multiple terminals.

Do you need multiple merchant accounts?

Whether you need multiple merchant accounts (and thereby multiple MIDs) often depends on what type of business you run. Most businesses will have their bases covered with a single merchant account. However, there are multiple businesses in high risk industries that will benefit from having more than one MID.

Having multiple merchant accounts is a good idea if you sell products that need special treatment. For example, if one of your products tends to involve high volume sales and another has high chargeback ratios it can be very useful to funnel these through different high risk merchant accounts. This would make it a lot easier to track different revenue sources. Additionally, it might even help you manage and minimize your processing fees. After all, some merchant accounts have different rates depending on the product type. This will allow you to have a merchant ID number list that covers your revenue streams in a more manageable way.

Get help reducing your chargebacks with the right credit card processing services

In the world of online credit card transactions there is rarely a single right answer. The best way to help you achieve your goals is, therefore, to make sure you have the tools to tackle the challenges you might face. Information is the greatest tool for finding out how to overcome specific obstacles that relate to your business. In short, this is the question you need to ask yourself:

Do I sell very different product types?

If the answer is no, then you should be well taken care of with one merchant account and MID.

If the answer is yes, then you should look into setting up multiple merchant accounts for your online e-commerce site or brick and mortar store.

However, you’ll also need to make sure your site and store is set up properly for high risk credit card processing. At E-Commerce 4 IM, we specialize in helping high risk businesses with their payment needs. If you’re looking for a merchant account for your site, we’re more than happy to set you up with one that will work brilliantly for your business. Simply get in touch via our website or call us at 1-800-570-1347  us today, and we’ll help you accept payments for credit and debit cards.

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