Our handy-dandy glossary of payments terms defines a merchant account as: “A bank account which the merchant holds with an acquiring bank to process credit card transactions.” A “merchant ID” or “MID” is the number that identifies one or more merchant accounts that belong to an entity. You need a MID to process payments to those accounts, as it is like the PO Box where your money goes. Having a MID is like a puppy; you have to protect and care for it or it will tear up your prized possessions–namely, your business.
How to get a Merchant ID Number
Having a business bank account is not all you need. You can have many merchant accounts, but one MID rules them all. First, you need a payment processor. Your options for one depend on your vertical. If you’re a high-risk merchant, your options are quite limited. By ‘limited’, we mean that even though there are lots of processors for merchants in your vertical, there are only a few legit and reliable ones out there.
You’ll also need a payment gateway such as Billapay. Your processor and gateway can transact for as many businesses and merchant accounts as you like, but they do so through one MID.
How to Care for your MID
Especially for high-risk merchants, it’s important to protect and maintain your MIDs. If not, you can “blow up” the MID, and it takes all your merchant accounts with it. Here’s how to NOT blow up your MID:
More About Merchant Services
- Have the right services for your business. If you’re a high-risk merchant, everything comes at a premium. Don’t try to cut corners. Bite the pillow and get a premium processor that is established in your vertical. The extra you pay will help smooth over that risk and save you on unexpected holds, fees, and other drama.
- Use comprehensive gateway authentication. Your gateway needs to collect enough data to ensure each transaction is above board. That means it needs Address & CVV Verification. It should also include device ID and geolocation features. You should capture enough authenticating evidence to prevent fraud without going over and taking on a bunch of excessive declines.
- Have a chargeback protection plan. Chargebacks are the number one killer of MIDs. Make sure you’re monitoring your transactions for disputes. Do your diligence to prevent fraud. And have a plan in place to manage the unsavory issues that arise from high-risk processing. If you’re seeing more than 1% of your transactions become chargebacks, you MID is in trouble.
If your MID blows up, it takes you with it. Your name, not your business, goes into the Terminated Merchant File. Once you’re TMF’d, it’s for life. At ChargebackHelp, we’re hard at work every day making sure our clients are not TMF’d. Put us to work for you! We can help you find the right merchant accounts, processors, and gateway. We can keep watch over disputes to prevent them from becoming chargebacks. The health of your MIDs is our specialty, so drop us a chat down on the right, shoot us an email, or go old-school and call us 1.888.821.5302 … we’ll help you keep that puppy rolling.