![]() When a merchant processes a credit card payment, the payment is transmitted between a front-end credit card processing center and a back-end settlement network via a secure payment gateway. Your MID is used to identify your merchant account when financial transactions are being routed through a computer network. Each MID affords you a unique accounting entity, which can be analysed individually and in accordance with your other merchant accounts. For example, a retail chain may opt to create a separate merchant account for each brick-and-mortar location as a way of distinguishing each property and more easily tracking sales trends for each one. ![]() Some businesses will also establish multiple MIDs for practical purposes. It’s important to establish a separate MID for each profit center. Mixing your transaction types might also violate the terms of your merchant account. The discount rate for lodging is typically much higher than the rate for food and beverages, and if you use the same MID for both, you may end up paying more than your profit margin for the food items. If you manage a hotel that also sells food and beverages, you’ll want to establish separate merchant IDs for these two revenue streams. ![]() This is an important distinction because a business can have several MIDs, especially if it has different revenue streams or profit centers.įor example, merchant services providers will classify businesses by type, with classifications that include:Įach of these business types is subject to its own guidelines, qualifying transactions, and base discount rate (the per-transaction rate charged to merchants). It’s only intended to identify the merchant account. It makes it possible to track where credit card payments are going and where they came from.Īlthough many businesses only have one MID, the ID number isn’t intended to identify your business specifically. What Is an MID?Īn MID is just a unique ID number for your merchant account. Because there are millions of merchants processing billions of transactions per day, an MID is essential for ensuring that your payments are properly routed at all times. Depending on the type of business you operate, you may even need multiple merchant IDs. Ever wonder what an MID is? When you establish a merchant account for your business, you’ll need a merchant identification number (MID).
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