Making a purchase may seem like a simple experience. However, whether a customer stops in to purchase a cup of coffee, a new car, or a movie ticket, several complex steps take place in the background to ensure the customer can pay for the item, the merchant receives those funds, and the merchant can then pay the payment processor for their help.
One thing that makes this process a lot smoother is a merchant identification number (MID).
When a MID is used improperly, there are several issues the merchant can suffer, including fines, jail time, and losing their livelihood. If you or someone you know has been accused of improperly using MIDs, they need a strong defense. Contact Sigal Law Group today for a free consultation. Our experienced merchant processing litigators are here to help.
What is a Merchant Identification Number?
A merchant identification number (MID) is a specific 15-digit alphanumeric identifier that payment processing systems use to communicate where funds should go in the payment process. Without a MID, funds could not be transmitted to the correct accounts.
Other benefits of managing MIDs include:
· Easier Payment Cards Industry (PIC) compliance reporting.
· Streamlined payment and account identification, which speeds up account reconciliations.
· Reduced fraud attacks and excessive chargebacks.
As such, managing MIDs is incredibly important for merchants. When a merchant is accused of improperly using MIDs, they can be forced to endure significant consequences, such as:
· Chargebacks
· Fines
· Higher processing fees
· Regulatory injunctions
· Potential legal action
Consequences for Improper MID Use
Merchants are typically accused of improper MID use when they are involved with a fraudulent third-party payment processing system or if they have set up a “fake business” and offered goods or services for sale that do not actually exist. If the merchant is found guilty of improper MID use, they can lose a number of things, but most especially their ability to provide for themselves and their families.
To ensure you are not unnecessarily punished for such accusations, it is important to reach out to a skilled attorney immediately. Contact Sigal Law Group today for a free consultation.
