Merchant Initiated Transactions (MIT)
Approval to charge customers' cards for ongoing payments without their active participation.
Merchant Initiated Transactions (MIT) is an optional service for you to charge your customer’s card without their activate participation. A transaction is first made with the cardholder actively present, or a cardholder payment agreement is made for future payments. MIT allows you to store a payment credential-on-file and use it for subscriptions, or on-going payments.
Use Cases
Stored credentials can help provide a seamless way for cardholders to transact online, in-app, or in-person with their favorite merchants. A stored credential-on-file can be used in either a cardholder-initiated or merchant-initiated transaction.
- Subscriptions payments: a subsequent ongoing payment for an e-course or service.
- Hotel additional charges or fees: A hotel charge for mini-bar expenses tallied after the guest has checked-out.
- Billing - Subsequent recurring payment that can vary in amount.
Note: The payment credentials temporarily retained to complete a single purchase are not considered as a stored credential-on-file. For one-time order fulfillment, or purchases made at a customers request refer to our Instant Pull Payments.
MIT Payment Flow
The first transaction in most payment workflows begin as a cardholder-initiated transaction (CIT).
Cardholder Initiated Transaction (CIT)
A cardholder-initiated transaction is any transaction where the cardholder actively participates in the transaction. This can be either at a terminal in-store or through a checkout experience online, or with a stored payment credential that the cardholder has previously consented to store with the merchant.
Note: Purchases of services made at a consumer’s request, such as ordering a ride are considered CITs because the cardholder is actively participating in the transaction.
Merchant Initiated Transaction (MIT)
Any transaction that relates to a previous cardholder-initiated transaction but is conducted without the active participation of the cardholder. As a result, the merchant cannot perform any cardholder validation. In all cases, a merchant-initiated transaction must refer to the cardholder’s original interaction. A transaction where the cardholder is not actively participating in the transaction.
Merchants commonly perform MITs without the active participation of the cardholder to:
- Perform a transaction as a follow-up to a cardholder-initiated transaction (CIT).
- Perform a pre-agreed standing instruction from the cardholder for the provision of goods or services.
Pre-Requisite: Registration
Clients need to register for a VMID (Visa Merchant ID) that corresponds with each Client ID.
Initial CIT
Subsequent MIT
Transparency of Payments
CIT and MIT indicators help increase the transparency and security of the transaction by providing additional information that can be used to monitor the proper use of payment credentials, supporting better informed authorization decisions, and mitigating risk.
Authenticating and Validating Cards
Card validation, or authentication (e.g. CVV2, 3DS) are performed for CITs.
Default Behavior for TabaPay Tokens
For TabaPay Clients who store TabaPay Tokens, the transactions that are performed using a TabaPay Account ID, will be by default considered as:
- Card on File for all Visa transactions
- Cardholder Initiated Credential on File for all MasterCard transactions
You can test and develop your customized default behavior, email [email protected] to get started.
Visa vs MasterCard Configurations
Visa Account Funding Transactions (AFTs) are permitted for use as Merchant-initiated transactions/Recurring transactions.
MoneySend payment or funding transactions, gaming payment transactions do not require CIT or MIT indicators.
Potential Benefits
Opportunity for possible improved MIT authorization approval rates
- Enables and accelerates growth of innovative eCommerce experience
- Supports eCommerce token transactions
- Enhanced with TabaPay Account Updater Service
How MIT works
Prerequisites
TabaPay Clients must be registered for the TabaPay MIT Service to be able to enable MIT for both Visa and MasterCard.
Create Transaction API Changes
The Create Transaction API will support an MIT object that includes:
- CIT-MIT Flag
- MIT indicator
- Purchase Identifier
- Original Network ID when CIT-MIT flag is MIT
1. CIT-MIT Flag:
Indicates to TabaPay whether the TabaPay Client is performing a cardholder-initiated or a merchant-initiated transaction.
- Use CIT when consumer initiates the transaction
- Use MIT when the consumer is not present
2. MIT Indicator
This field contains an indicator for: Recurring payments where the cardholder and merchant have agreed to periodic billing for goods and services, such as utility bills and magazines. OR Installment payment that indicates that the message is being used for an installment payment. OR Credential on File OR a standing order with a standing instruction from cardholder to use the payment instrument for paying with a variable amount and fixed frequency.
Values are:
- Credential on File
- Standing Order (variable amount/fixed frequency)
- Subscription (fixed amount/fixed frequency)
- Installment
3. Purchase Identifier
A TabaPay client generated unique identifier that remains the same for both the initial CIT and subsequent MITs. Issuers could use this identifier for correlating transactions. A reliable presence may improve issuer approval rates
Note: The value sent in the Create Transaction API Request of the CIT will have to be retained and passed in subsequent Merchant Initiated Transaction(s) that pertains to the same Cardholder MIT agreement.
4. Original Network ID when CIT-MIT flag is MIT
For subsequent MITs, TabaPay Clients must pass the Network ID in the Create Transaction request of the original first CIT.
MIT Recipes (Code Samples)
CIT-MIT Indicators
| CIT MIT Flag | CIT-MIT Indicator | Definition | Example |
|---|---|---|---|
| CIT | Credential on File | Consumer agrees to store the credential on file with the merchant for future cardholder-initiated and/or merchant-initiated transactions that may occur from time to time, or consumer chooses to use a credential previously placed on file with the merchant when making a purchase. | The consumer initiates a purchase and merchant prompts consumer to store the credential-on-file for future cardholder-initiated purchases. |
| CIT | Standing Order (variable amount and fixed frequency) | Consumer agrees to store the credential-on-file and initiates a first transaction in a series intended to be for a variable amount and a fixed frequency. | The initial transaction to store the credential-on-file for a monthly utility payment. |
| CIT | Subscription (fixed amount and frequency) | Consumer agrees to store the credential-on-file and initiates a first transaction in a series intended to be for a fixed amount and a fixed frequency. | The initial transaction to store the credential-on-file for a monthly newspaper subscription. |
| CIT | Installment | Consumer agrees to store the credential-on-file to establish an installment plan and initiates a first transaction in a series. The installment plan should reflect the single purchase of goods/services with a known amount and set frequency over a specified duration. | The initial transaction to store the credential-on-file for a purchase to be paid through installment payments |
| MIT | (Unscheduled) Credential on File | A transaction made pursuant to an agreement between a cardholder and a merchant, whereby the cardholder authorizes the merchant to store and use the cardholder’s account data to initiate one or more future transactions. The transaction can be for a fixed or variable amount but does not occur at regular intervals on a scheduled date. | The consumer agrees to allow a tollway merchant to initiate transactions when the balance in the consumer account with the merchant falls below an established amount (auto top-up). |
| MIT | Standing Order (variable amount and fixed frequency) | A transaction made pursuant to an agreement between a cardholder and a merchant, whereby the cardholder authorizes the merchant to store and use the cardholder’s account data for a transaction that must occur at regularly scheduled intervals for a variable amount, as specified in the agreement. | Monthly utility payments. |
| MIT | Subscription(fixed amount and frequency) | A transaction made pursuant to an agreement between a cardholder and a merchant, whereby the cardholder authorizes the merchant to store and use the cardholder’s account data for a transaction that must occur at regularly scheduled intervals for a fixed amount, as specified in the agreement. The subscription agreement may include an allowance for introductory pricing or for price changes to occur from time to time. | Monthly subscription or fixed monthly service payment. |
| MIT | Installment | A transaction in a series of transactions made pursuant to an agreement between a cardholder and a merchant, whereby the cardholder authorizes the merchant to store the cardholder’s account data for use by the merchant to initiate one or more future transactions for a known amount over a specified duration based on a single purchase. | Purchase a television for $1,000 USD, pay in four equal installments of $250 USD (first transaction is CIT, remaining three transactions are MIT). |
MIT FAQs
How do I participate in TabaPay’s MIT service?
Contact [email protected] or reach out to your TabaPay Representative to register for TabaPay MIT. Each network requires registration and we want to make sure you are suitably enabled.
What issuer decline reason codes will prevent the Original record from being stored?
| Value | Response Code | Description |
|---|---|---|
| 04 | Pickup Card (no fraud) | A card has been canceled |
| 07 | Pickup card, special condition (fraud account) | Fraud-compromised account |
| 14 | Invalid account number (no such number) | Account number is not valid |
| 41 | Lost card - pickup | Cardholder has reported the card lost |
| 43 | Stolen card - pickup | Cardholder has reported card stolen |
| 46 | Closed Account | Account is closed |
How does this process work with TabaPay Account Updater?
TabaPay Account Updater works independently of TabaPay MIT Service and if a credential is updated, it will be used in the MIT transaction.
How do I use MIT in combination with Apple Pay Merchant tokens?
Apple Pay Merchant tokens MUST provide the MIT-CIT flag as well as the MIT indicator.
When using [Apple Pay Merchant tokens, depending on the value of the CIT-MIT flag, cryptogram may or may not be required:
- If flag is CIT, mobile pay object requires cryptogram
- If flag is MIT, mobile pay object does not require cryptogram. Along with this MIT flag, merchant must include original transaction ID.
In what situations will MIT not be allowed for an initial CIT?
When the network response code is any of these for the initial CIT:
- 04 - Pickup Card (No fraud)
- 07 - Pickup Card, Special Condition (fraud account)
- 14 - Invalid Account Number
- 41 - Lost Card - Pick up
- 43 - Stolen Card - Pick up
- 46 - Closed Account
More Recipes
Updated 2 months ago