What Are Merchant Category Codes (MCCs) & Why Do They Matter?

Merchant Category Codes (MCCs) play a key role in payment processing. Having a solid understanding of these codes is, therefore, essential for any business that accepts credit cards and other electronic payments. 

This guide will look at how MCCs work, how they are assigned, and their significance to merchants.

What is a Merchant Category Code (MCC)?

Merchant Category Codes (MCCs) are four-digit numbers that credit card networks use to classify merchants into different market segments. Your assigned merchant category code reflects the primary category in which you do business. Currently, there are around 600 MCCs in total that denote various types of businesses.

How are MCCs assigned?

Acquirers or merchant service providers assign MCCs to merchants during the account application and setup process.

The International Organization for Standardization (ISO) sets and defines the codes. However, each card network (e.g. Visa or Mastercard) has its own list of MCCs in use as well as its own definition of what a merchant’s main area of business is. This means you can have more than one MCC, one at each card network.

How can I find my merchant category code?

One easy way to find your MCC is to contact the credit card network(s) you accept payments from. The network will tell you which MCC matches up with your business segment.

You can also look it up online — all the major credit card networks, including Visa, MasterCard, and American Express, have lists of MCC codes on their websites that merchants can easily access.

Here are the links to the codes for each card network.

• VISA MCC Codes
• MasterCard MCC Codes
• American Express Codes

While each MCC is specific to a merchant’s main product line or service, businesses whose operations are closely related will usually fall within the same MCC number range. Knowing the range your business falls into can make it easier to pinpoint your exact code from the card networks’ lists of MCCs. For example, if you run a clothing store, your MCC will likely be in the 5600 to 5699 range.

Here is the complete list of number ranges for different merchant categories.

• MCCs 0001–1499 (Agricultural Services)
• MCCs 1500–2999 (Contracted Services)
• MCCs 3000–3299 (Airlines)
• MCCs 3300–3499 (Car Rental)
• MCCs 3500–3999 (Lodging)
• MCCs 4000–4799 (Transportation Services)
• MCCs 4800–4999 (Utility Services)
• MCCs 5000–5599 (Retail Outlet Services)
• MCCs 5600–5699 (Clothing Stores)
• MCCs 5700–7299 (Miscellaneous Stores)
• MCCs 7300–7999 (Business Services)
• MCCs 8000–8999 (Professional Services and Membership Organisations)
• MCCs 9000–9999 (Government Services)

Why are MCC codes important to merchants?

Impact Interchange Rates: Credit card networks and payment processors use MCC codes to determine your business’s risk level. Your risk level, in turn, directly impacts the interchange fees that are a major component of your merchant service charge (MSC). 

Merchants with high-risk MCCs, like those in industries with high rates of fraud or customer disputes, may be subject to higher interchange fees from their acquirer or merchant service provider.

Identify High-Risk Industries: Your MCC code may also affect your ability to get services from merchant service providers. For example, some providers may not want to work with a merchant whose type of business they deem high-risk. They may also black-list certain companies with specific MCCs with which they don’t want their brand linked.

Determine Chargeback Protections: High-risk MCCs may not enjoy the same fraud protection as other lower-risk MCCs and may be subject to higher fees for individual chargebacks. For example, businesses classified as direct marketing or gambling don’t have the same eCommerce fraud protections in card-not-present transactions.

Influence Credit Card Reward Calculations: Some credit card companies have reward programmes that give customers rewards or cashback when they make purchases in specific MMC categories. Customers may be motivated to transact more with your business to enjoy rewards if your MCC falls into a frequently rewarded business category. The result will be more revenue for your business.

What effect will a high-risk MCC code have?

Having the correct MCC code can ensure that you are not paying more transaction rates and fees than necessary or that your merchant service provider does not deny you certain privileges.

Here are some MCC codes that credit card networks currently classify as high-risk.  If a business has any of these codes, your payment processors might impose higher approval terms and fees.