Why Multiple MIDs are a Must for Universities

Treasury departments and others who manage payments operations for colleges and universities face unique challenges. Not only must they consider the student user experience, but they must also consider security and compliance, payment processor and service provider management, and customer support. The sheer number of relationships to manage is staggering. So it’s no surprise that the recommendation to leverage multiple merchant identification numbers (MIDs) may raise a few eyebrows. 

While it might seem counterintuitive, using multiple MIDs can actually save time and money in the long run. We’ll look at some of the key reasons that universities are well-advised to use multiple MIDs to streamline payments across the entire university ecosystem. 

Simplify Reconciliation 

Reconciliation is a burdensome process for universities, but accuracy and precision must be paramount. Unsubstantiated expenditures, accounting misclassifications, and lack of proper documentation can put universities — and individual units — at risk. 

With separate MIDs for different departments and payment channels, universities can avoid going over budget, instances of fraud, and co-mingling of multiple units’ expenses. Leveraging separate MIDs also reduces reconciliation into more manageable bites for each department and payment channel. As budgets tighten and funding ebbs and flows, accounting for each and every dollar becomes integral to the success of higher education institutions. 

Improve Security

Data breaches continue to plague organizations of all types and sizes — and universities are not immune. The average ransomware attack cost educational institutions $2.73 million last year. Timing matters when it comes to addressing breaches and identifying the problem. 

When universities use multiple MIDs across units, determining where a breach has occurred can happen quickly. If it becomes necessary to shut down processing to stop the breach, multiple MIDs enable administrators to shut down very targeted areas rather than terminating processing across multiple departments or payment channels. 

Cut Costs with the Right Processing Rates

Perhaps one of the most overlooked reasons for using different MIDs is that MCC codes and business types are charged different processing rates. Restaurants are charged rates that differ from tuition and healthcare, for example. If your dining hall is set up under the same MCC code as the university, you’ll likely be paying higher processing fees than if you had set up the dining hall under a separate MID as a quick-serve restaurant. When you consider all the different departments and units with all of the different processing rates, it’s easy to see how pennies can add up to dollars quite quickly. 

Adhere to Card Brand Rules

Many card brands require separate MIDs for merchants that operate in different locations. Visa, for example, requires merchants to submit data on the type of business and merchant location. Card-present transactions require merchants to report the physical location where the transaction takes place. 

These rules benefit merchants, too. Reporting accurate information as part of a separate MID helps to reduce unnecessary cardholder disputes and conduct accurate risk assessments and authorization decisions. 

If the idea of using multiple MIDs for each unit or payment channel across your campus (or campuses) sounds daunting, we’re here to help. Contact us for a free consultation today and we can help you understand the best path forward for your university.