Merchant Category Code (MCC)
A four-digit code classifying businesses by the type of goods or services they provide.
What is Merchant Category Code (MCC)?
A Merchant Category Code (MCC) is a four-digit code assigned by card networks to classify merchants by business type. MCCs are used for interchange rate determination (some categories get preferential rates), rewards calculation (category bonuses on credit cards), expense categorization, and compliance (some cards restrict certain MCCs). Your MCC is assigned during underwriting and affects your processing costs.
Why It Matters
MCC affects your interchange rates. Certain categories (supermarkets, utilities, education) have preferential rates. Incorrect MCC assignment can mean paying higher rates than necessary. MCC also affects whether customers can use certain cards with your business and how their purchases are categorized for rewards.
Related Terms
Interchange Fee
The fee paid by the merchant's bank to the cardholder's bank on every card transaction.
Underwriting
The risk assessment process for approving merchant accounts and setting terms.
Merchant Account
A bank account that allows businesses to accept credit and debit card payments.
Interchange Optimization
Strategies and technologies to qualify transactions for the lowest possible interchange rates.
Frequently Asked Questions
Your processor assigns MCC during underwriting based on your primary business type. If your business spans multiple categories, you get the code matching your dominant revenue source.
Yes, if you can demonstrate a different code better reflects your business. Contact your processor with documentation. Incorrect MCCs can sometimes be corrected.
Customer rewards (2x points on dining, 5% back on groceries) are based on MCC. Some corporate cards restrict certain MCCs. Your code affects how customer purchases are categorized.
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