What Is a Merchant ID Number and Why Do You Need One – The Complete Guide


For the fiscal year 2021, the Indian offline market has shrunk by 5%, whereas the eCommerce market has seen a growth of 25%. It is likely to see the same growth for the next 5 years as well. As per the report issued by Kearney, one-third of the Indian population will be actively shopping online by the year 2030. This is quite a huge prediction.

The Indian offline market has been losing its share since the hit of the coronavirus pandemic as many of the customers are only preferring online shopping and online payments. Due to this, there is cut-throat competition among retail players to acquire a wider customer reach.

For receiving payments securely and through the right accounts, merchants are required to obtain a unique identification number known as MID (Merchant ID or Merchant Identification Number) to enable the smooth processing of online payments through cards.

Since there are lots of businesses operating in the online market and accepting digital payments, it becomes important for every merchant to have a unique identity while receiving payments. This is because the payments are often credited to the wrong accounts and to avoid the same, the merchants must have their own MIDs.

Today in this article, we are trying to understand the complete guide on merchant ID numbers and why you need one to operate your merchant account for your online website.

What is a Merchant ID number?

A merchant ID number is a unique and specific number issued by your payment provider which works as an identity for your business to accept payments via payment gateway. The MID helps you in receiving secure payments and does not let it get credited to someone else’s account.

Through the merchant account, the funds can be transferred between the customer’s bank and the merchant’s bank seamlessly. It makes sure to eliminate ambiguity or insecurity that might happen in card payments, refund processes, and any other cashless transactions. In the case where merchants are running multiple business lines and models, they can have more than one merchant ID. Having different IDs helps the merchant to have a separate record for each of the business lines.

Why do you need a Merchant ID Number?

There are many such reasons why a merchant needs a merchant ID number. Some of the reasons are as below:

  • Mandatory requirement- To accept online payments via payment gateway or payment link securely, you must acquire a merchant ID number. Without a valid merchant ID number, you cannot accept online payments. A payment gateway is a secured bridge between you and your customer. Use Zaakpay to accept faster and safer payments.
  • Safe delivery of funds- The merchant ID number helps you integrate your online business into payment systems to get safe delivery of funds in your bank account.
  • Easy identification- Every business needs a unique identity to differentiate itself from others. A merchant ID number provides a distinctive identification for every business.

How to acquire a Merchant ID Number?

The steps given below are required to be followed to get your merchant ID number-

  1. First things first, you need to register for a merchant account.
  2. Your payment partner will then verify your business. Once verification is done, you can operate your merchant account. For verification, you will be required to do the KYC along with necessary documents such as registration, business legality, taxation proof, ownership proof, etc.
  3. The payment service provider will issue a merchant account number along with the merchant ID number.

What is the difference between the Merchant ID Number and Merchant Account Number?

Both of the terms are closely related to each other, yet very different and hence, we will try to understand their features to identify the differences-

Merchant ID NumberMerchant Account Number
A merchant ID number does the work of differentiating the business from the rest in the industry. A business may have many MIDs for the individual business units, but all MIDs are connected to only one Merchant Account number.A merchant account number is issued by the payment service providers after the creation of a merchant account.A merchant can only have one merchant account despite being operating in many business units.

Where can you find your Merchant ID Number?

Since merchant ID is a confidential number, it is not available in the public domain. If anyone wants to access your merchant ID number, they must need to get involved in your business directly to be authorized to access it. Therefore, it becomes very important for you to guard your merchant ID against unauthorized persons.

In case you ever want to track your merchant ID for any exigency, you can find it in the following locations-

  • Bank statement of your account
  • Merchant statement from your payment gateway dashboard
  • Terminal
  • Your merchant service provider
  • Your Payment history
  • Your Zaakpay merchant account

What are the other IDs used in the payment processing sphere apart from Merchant ID?

You should be aware of other types of IDs used in the card payment processing system. These IDs give you the ease of business identification, branch identification, and network of a specific transaction. These include-

  • GIDs (Specific network IDs)
  • TIDs (Terminal Identification for a specific terminal)

How to protect your Merchant ID from disputes?

You can take the following actions to protect your merchant ID-

  • You can use a CVV number as fraud protection that helps to match customers’ card CVV and the one entered at the checkout process.
  • AVS is also a useful technique you can use to detect customers’ billing and shipping addresses. In case of any discrepancy, you can reject the order.
  • By applying 3D security, you can authenticate your customer’s card and protect your merchant ID number.

If you are stepping into an online business, a merchant ID number is a necessary action, specially to accept payments from Credit/Debit Cards. Once you are registered with Zaakpay, your business will go through easy verification and activation.

To Know About – Aalyah Gutierrez