What are MCCs?

Payment brands use merchant category codes (MCCs) to identify businesses by the type of goods or services they provide. Payment brands, issuers, and acquirers use MCCs to categorize, track, and restrict transactions. MCCs are also used for tax reporting, interchange promotion, and gaining information about cardholder purchasing behavior.

How do I find a merchant category code?

To find a business’s MCC, call your processor, review your card statement, or call the number on the back of your card. Calling customer service and asking them directly how they show up on card statements is also an option.

How do I choose a MCC code?

Businesses cannot choose their MCC codes, but can request a specific MCC designation from their payments processor, which will be granted if the business meets the criteria for the specific MCC designation.

Who determines merchant category codes?

Credit card networks (Visa, Mastercard, American Express, and Discover) assign merchant category codes. Codes allow payment processors to classify, categorize, and process the transaction for accounting processes. MCCs also help customers easily identify what type of business they made a payment to. For example, a retailer’s MCC might be classified as 5691 (Men’s and Women’s Clothing Stores).

All payment brands recognize MCCs, but not all brands recognize every code. Payment brands regularly add, erase, or change the codes.
One credit card company may assign a merchant a 7999 MCC for recreation services, but another credit card network could give them a different code. Merchants must know each network’s code to ensure accuracy and compliance. Incorrect codes can carry higher processing fees, inaccurate transaction taxation, and other issues.

How do you get a merchant category code applied to your business?

A business receives a MCC when it first sets up its merchant account with a payment processor.
When signing up, the processor will assign a code or provide a list of codes that classify different types of businesses.

Go through the list and make sure that your code is correctly assigned and accurately reflects the type of business you provide. Note that because MCCs can change over time, you’ll want to regularly check with the processor to ensure yours is up-to-date.

Examples of MCC codes

Here’s an idea of MCC codes for a variety of business categories.

• 4722 – Travel agencies and tour operators
• 5411 – Grocery Stores and Supermarkets
• 5941 – Sporting Goods Stores
• 5942 – Book Stores
• 5943 – Stationery Stores, Office and School Supply Stores
• 5945 – 6012 – Financial Institutions – Merchandise and Services
• 6300 – Insurance Sales, Underwriting, and Premiums
• 8999 – Professional Services
• 9311 – Tax Payments
  9399 – Government Services

Why Do Merchant Category Codes Matter?

MCCs allow payment processors and merchants to protect their businesses.
For payment processors, MCCs help assess the credit risk associated with specific merchants. Using MCC codes, payment processors can identify high-risk transactions and businesses that need more security measures or stricter checks processing payments.

For merchants, MCCs ensure they get the best rates and terms for their payment processing services. By using the right MCC codes, merchants can know they’re getting the proper rate and fee structure for their transactions.

Important benefits include:

• Improved fraud protection
• Compliance with tax and financial reporting regulations
• Better rates and fees for payment processing services
• Accurate transactions accounting
• Greater insights into payment processing data

How are MCCs used in credit card processing?

MCCs have several usages. Here’s a brief list:

Credit card rewards programs

Many credit card rewards programs use MCCs to ascertain which transactions qualify for points or rewards. For instance, cardholders may get additional rewards or cash back for purchases at restaurants or retailers with a specific MCC code.

Determining interchange fees

MCCs identify the transaction type, which helps determine the right interchange fee. Card issuers set the interchange fee that merchants pay for processing credit card transactions.

Invoicing and reporting

Many accounting systems use a merchant’s MCC code to categorize transactions for invoicing and reporting. This helps streamline quarterly or annual reporting processes, allowing merchants to focus on the day-to-day business operations.

ISR (Internal Security Reviews) and other fraud prevention measures

MCCs are used in ISRs and other additional security measures before processing payments. This reduces the risk of fraud by making it easy to identify suspicious transactions.