EIN (Employer Identification Number)

An EIN, or Employer Identification Number, is the nine-digit number the IRS issues to identify a business for federal tax purposes. It is written in the format 12-3456789 and functions as the business equivalent of a Social Security number. Sole proprietors with no employees can often operate without one, but any business seeking a merchant account in its own name will need it.

For payment underwriting the EIN is a matching key, not a formality. The acquirer checks that the EIN, the exact legal entity name, and the bank account all agree with each other and with IRS records. A business that has rebranded, changed structure, or opened a bank account under a slightly different name is the most common source of a mismatch, and a mismatch will stall an application even when everything else in the file is clean.

The fastest way to avoid that delay is to submit the name exactly as it appears on your EIN confirmation letter, rather than the trading name customers see. If you cannot find the letter, the IRS can reissue confirmation of the number. Merchants applying from outside the United States will not have an EIN at all and are identified by their local tax number instead, such as a Canadian Business Number.

Sole proprietors can sometimes process under a Social Security number, but for a high-risk account an EIN paired with a business bank account in the same legal name is strongly preferred, because it evidences a real, separable business entity rather than an individual taking payments.