Merchant Initiated Transation (MIT)

Merchant Initiated Transactions (MITs) are payment transactions initiated by the merchant rather than the customer. These transactions typically occur when the merchant processes payments on behalf of the customer without requiring the customer to physically authorize each individual transaction after an initial consent or mandate is given, mostly when doing the initial CIT.

MITs are commonly used for recurring billing, installment payments, or situations where the merchant charges the customer’s account based on agreed terms.

MITs enable merchants to streamline payments for services or products where periodic or post-purchase payments are required without repeated customer interaction.

Key Characteristics

• Merchant Initiation

  Once the customer grants an initial authorization or mandate, the merchant can initiate subsequent transactions as per the agreed schedule or terms.

• Customer Consent

  Initial consent is mandatory, typically captured during the purchase or contract setup.

• Recurring or Ad-Hoc Payments

  MITS can be used for recurring subscriptions, installment plans, or one-off post-sale charges.

• Authentication

  Initial setup requires customer authentication. Subsequent transactions usually do not require additional customer action unless mandated by regulations.

• Depending on the PSP, there could be different type of requirements for processing successful MITs.

• Mostly, when performing MITs, the initial reference will be needed. This reference points back to the initial CIT transaction, making a link to it.