Merchant Category Code
What Is a Merchant Category Code? Definition and How It Works
Definition
A Merchant Category Code (MCC) is a four-digit number assigned by the acquiring bank to a merchant that classifies the type of business or industry the merchant operates in, used by card networks to determine applicable interchange rates, compliance requirements, and acceptance restrictions.
How it works
MCCs are defined by card networks, Visa and Mastercard publish their own MCC lists, which are substantially aligned but not identical. The codes cover over 500 business categories, from airlines (4511) and hotels (7011) to supermarkets (5411), software (5045), and charities (8398). Each acquirer assigns an MCC to a merchant at onboarding based on the merchant's primary business activity.
The MCC directly affects interchange rates. Card networks publish interchange rate tables organised by MCC category: some categories (supermarkets, utilities, fuel) have preferential interchange rates that reflect the high volume and low fraud characteristics of those merchant types. Others (direct marketing, digital goods) carry higher rates. A merchant with an incorrect MCC may be paying higher interchange than they should.
MCCs also trigger compliance requirements and acceptance restrictions. Certain MCCs are restricted: gambling (7995), adult content (7273), and others require special scheme registration or are outright prohibited from accepting certain card types. Acquirers must register merchants in restricted categories with card schemes before they can accept those card types.
Merchants can have only one primary MCC per merchant account. Merchants with genuinely diverse business activities, a hotel that also operates a restaurant and a spa, typically use the MCC for their primary revenue source. Separate merchant accounts with separate MCCs may be needed for significantly different business lines.
Why it matters
Incorrect MCC assignment costs money: a merchant incorrectly classified in a higher-rate interchange category pays more per transaction than their actual business type warrants. Reviewing MCC assignment and requesting correction through the acquirer is a low-effort cost reduction measure for merchants paying unexpectedly high blended rates.
MCC determines chargeback ratio monitoring thresholds: some scheme monitoring programs have different chargeback thresholds for specific MCCs. High-risk MCCs (gambling, travel) face lower chargeback thresholds before entering monitoring programs, reflecting the higher expected dispute rates in those categories.
MCC misclassification is a scheme compliance risk: intentionally misclassifying a merchant (placing a gambling business under a low-risk MCC to access lower interchange or avoid registration requirements) is a scheme rule violation that results in fines and potential termination.
Level 2 and Level 3 data eligibility is partly MCC-dependent: certain B2B interchange rate categories that offer lower rates for commercial card acceptance require specific MCCs. Merchants accepting corporate cards should verify whether their MCC qualifies for Level 2/3 rate categories.
With PXP
PXP assigns MCCs to merchants at onboarding based on primary business activity and in compliance with card scheme registration requirements. Merchants in restricted MCC categories are registered with Visa and Mastercard as required. MCC-specific interchange data is available in PXP's transaction cost reporting.
Frequently asked questions
What is the MCC for software and technology companies?
MCC 5045 (Computers and Computer Peripheral Equipment and Software) and MCC 7372 (Computer Programming, Data Processing) are common MCCs for technology companies. SaaS businesses and digital product sellers may also be assigned MCC 5817 (Video Game Arcades/Establishments) for gaming platforms or category-specific MCCs depending on their primary revenue type. The correct MCC depends on the specific nature of the business activity.
How does a merchant request an MCC change?
MCC change requests go through the acquirer. The merchant submits documentation of their business activity and the reason for the change, and the acquirer reviews the request and updates the MCC if the correction is justified. Card networks may also request MCC reviews as part of monitoring programs. Merchants who believe they are incorrectly classified should contact their acquirer directly.
Can a merchant have multiple MCCs?
A single merchant account has one MCC. Merchants with genuinely different business activities operating under separate legal entities or in separate markets may have multiple merchant accounts with different MCCs. Within a single merchant account, the MCC reflects the primary business activity. Acquirers and schemes have rules against splitting business activity across MCCs to circumvent higher rates or registration requirements.
What happens if a restricted MCC merchant accepts cards without scheme registration?
Operating under a restricted MCC (such as gambling or adult content) without completing the required scheme registration exposes the merchant and acquirer to scheme fines and potential suspension of card acceptance. Acquirers are responsible for ensuring their restricted MCC merchants are properly registered. Merchants in restricted categories should confirm their scheme registration status with their acquirer before going live.
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