Payment Processing Error: Invalid Merchant ID Solutions

Payment Processing Error: Invalid Merchant ID

Payment processing errors have been causing frustrations and headaches for business owners since the invention of the credit card. Let’s talk about a popular one: “Invalid Merchant ID”

Unfortunately, many issues with processing, like declines, are controlled by the customer’s card-issuing bank. Business owners have little control over the situation when this is the case. In fact, if your customer’s card has been declined (for many different reasons) you should always suggest they contact the 1-800 number listed on the back of their card. The reasons could include an expired card, incorrect card number, AVS (or location based) restrictions, insufficient funds in the account or over a certain credit limit, or the card could simply be blocked as suspected fraud.

Occasionally, there are processing error codes that you CAN control as a business owner! Good news! “INVALID MERCHANT ID” is one of these processing codes. When your terminal or gateway reads “invalid merchant id” there is likely a configuration error in which the merchant login ID is invalid or the account is inactive. Read on for potential causes for this error and the corresponding solutions. If you’re getting this error and can’t figure out what it means, chances are you need a better merchant service provider. Give Durango a call!

Now… let’s talk about the details…

What is a Merchant ID?

A Merchant Identification Number (or MID) is given to you by your processor once you have been approved for a merchant account. This unique identifier allows you to guarantee payment into your account from your customer. The gateway that processes the payment uses this identifier to verify that you have an active and legal merchant account before processing payment. Similar to a bank account and routing number, or even your physical address, no other business can have your same number. The banks use it to tell the software where to send your money.

How Do I Get A Merchant ID? 

You receive a Merchant ID when you go through the business verification process with a licensed merchant services provider (like us!). Merchant IDs are private numbers and do not exist in a public database. Although applying for a merchant account can seem like a daunting project, it’s not! We’ve been doing this a long time and can give you all of the tips and tricks for getting approved for a merchant account, even if your business is considered high risk.

Why Am I Getting An “Invalid Merchant ID” Error Code? 

Improper Set Up And Linking Of Your Merchant Account To Your Gateway

This is the most likely explanation for the “Invalid Merchant ID” error code. It’s conveying that there is a broken connection between the gateway and the merchant account you’ve set up. During set up, it’s possible the wrong merchant ID got entered into the gateway. Typing errors are easy to make! Look for a message like, “ “This transaction cannot be processed due to an invalid merchant configuration.” Next, double check your numbers and then contact your processor to see if they made an error on their end.

Improper Card Configuration

When you set up your merchant account, it will need to be configured to be able to accept specific types of cards. If your customer is trying to pay with Amex, Diners or another non-Visa or Mastercard issued card, your account will need to be configured to be able to accept those payment types. Contact your processor and ask them to configure the merchant account for the specific type of card you are having issues

Outdated Technology

Gateways such as often change and update their integration methods for better security and user experience. We suggest checking with your processor and gateway provider to see if you are using the latest and most reliable integration method. Upgrading your software helps to protect you against spam, fraud and potential errors down the road. 

A second quick note on technology, it’s possible that you were issued a sandbox, or trail account. These accounts are meant for you to experiment with the merchant account log in, but these types of accounts will not actually allow you to process transactions from your customers. Contact your processor and clarify that you are ready to jump in and get approved for your own account.

Error On The Bank’s End

This reason is rare, but is worth mentioning because mistakes ARE made and occasionally there will be a processing error caused by a glitch from your bank. If your account was bought by another company, or merged with another bank, then your Merchant ID would change. The best way to troubleshoot this issue would be to call your processor or your processing bank directly to see if this is an outage that other merchants are experiencing. They will be able to quickly let you know what to do to fix the issue or if you just need to wait it out.

Your Merchant Account Has Been Closed Down

One of the possible reasons you could be getting the “Invalid Merchant ID” error code is if your merchant account has been closed down. Merchant accounts get closed when a bank feels like your account poses too much financial risk. The risk potential could be for a vast number of reasons, but on the merchant side of things, a merchant account closure can feel catastrophic! If you feel you’ve entered the correct Merchant ID, double check, and then call your processor. If your account has gotten shut down then it’s possible to get this error code.

Keep in mind that if you feel your merchant account is being threatened, you can give us a call! We’re experts in the high risk field and are happy to give you tips and advice on how to prevent a potential account closure. We can also help you get approved with a specific high risk processor so you don’t have to worry about holds, freezes, declines, chargebacks or audits at any moment.

Get In Touch With Someone Who Can Help RIGHT NOW! 

Now that you know the most common reasons for the “Invalid Merchant ID” error code, you’ll be able to troubleshoot when you see this issue cross your terminal or gateway. That being said, sometimes you just need the quickest solution possible and just need someone to fix it! That’s where we come in! We pride ourselves on our amazing team of payment processing professionals that are available directly during business hours. When you process with us, you’ll get a dedicated account manager that will guide you through the set up process and you’ll be able to reach them whenever you have an issue. Contact us today and we would love to troubleshoot with you! Let’s get you up and processing ASAP!


Security Smartphone

Get Started Now

Call to talk to one of our account managers today!

Apply Today

Scroll to Top