Merchant Initiated Transactions (MIT) enable merchants to process payments using previously agreed payment credentials, without requiring the customer to actively participate in the payment process at the time of the transaction.
MIT payments are commonly used when future charges need to be performed after an initial customer-authorized transaction.
MIT provides a single, unified model for processing both Recurring and Unscheduled Card-on-File (UCOF) transactions, ensuring compliance with Visa and Mastercard Stored Credential frameworks.
Payment Capability
| Category | Supported Models | Authentication | Schedule Support | Integrations |
|---|---|---|---|---|
| Card-on-File Payments | Recurring, UCOF | SCA required on initial CIT only | Recurring only | API, Payment Form (initial CIT) |
Why use MIT
MIT enables merchants to securely process future payments using stored credentials while reducing customer friction.
Stored Credential Framework Compliance – Supports Visa and Mastercard requirements for Card-on-File and Merchant-Initiated Transactions.
Reduced Checkout Friction – The customer only needs to authenticate during the initial Cardholder-Initiated Transaction (CIT).
Support for Multiple Business Models – Supports both subscription-based billing and event-driven merchant charges.
Flexible Business Models – Supports both scheduled recurring billing managed automatically by SIBS Gateway and merchant-triggered event-based payments through UCOF.
Scalable Processing – Designed to support high-volume transaction processing across multiple acquirers and geographies.
Simplified Onboarding – Configuration and management are available through SIBS Backoffice.
How it Works
MIT transactions follow a two-step model.
Step 1 – Initial CIT
The customer performs a standard payment using the Checkout API. During this transaction:
- Strong Customer Authentication (SCA) is performed.
- The customer authorizes the storage of payment credentials.
- A Card-on-File agreement is established.
- An original transaction identifier (original-tx-id) is generated.
This transaction becomes the reference for future MIT operations.
Step 2 – Subsequent MIT
Future transactions are processed using the agreement established during the initial CIT.
Depending on the MIT configuration, these transactions may be:
- Initiated directly by the merchant;
- Automatically executed by SIBS Gateway according to a recurring schedule.
When to use MIT
MIT payments are suitable for scenarios where merchants need to process future payments without the cardholder being present, based on a prior agreement established during an initial customer-authorized transaction.
Common use cases include:
- Subscription-based services
- Membership fees
- Utility billing
- Delayed charges
- Additional service charges
- Stored credential payments
- Operational adjustments to previous transactions
Integration Types
SIBS Gateway supports the following MIT transaction models:
Recurring Payments
Recurring Payments are designed for subscription-based services and recurring billing scenarios where charges occur according to a predefined frequency.
During the initial Cardholder-Initiated Transaction (CIT), the recurring agreement and billing schedule are established. After the initial payment, SIBS Gateway automatically executes all subsequent Merchant-Initiated Transactions (MITs) according to the configured schedule.
Learn more about Recurring Payments here.
Unscheduled Card-on-File (UCOF)
UCOF Payments are designed for merchant-initiated transactions using stored card credentials when charges do not follow a predefined schedule.
They are initiated by the merchant whenever a valid business event occurs.
Learn more about UCOF Payments here.
MIT Transaction Model
MIT follows Visa Stored Credential Framework requirements and Mastercard Card-on-File rules.
Both MIT types are built on the same foundation:
Initial CIT
The initial transaction is initiated by the customer and must include:
- Strong Customer Authentication (SCA)
- Customer consent for credential storage
- Creation of the Card-on-File agreement
- Storage of card credentials or payment token according to the selected integration model
- CIT classification with COF setup
Subsequent MIT
Future MIT transactions:
- Reference the original CIT transaction
- Use stored credentials
- Benefit from MIT authentication exemptions
- Can be processed as Recurring or UCOF transactions