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Merchant Category Code

Overview#

Merchant Category Code (MCC) is a four-digit Code, listed in ISO 18245 for retail financial services, issued by the Payment Network (Visa, Mastercard, Discover, American Express) assign to every Merchant that applies to accept Payment Cards during Enrollment.

Merchant Category Code is based on the predominant business activity of the merchant and are often never changed even though the Merchant changes their Line Of Business.

Merchant Category Code may be different for the different Payment Networks.

Merchant Category Code is used for Classification:

  • to determine the Interchange Fee paid by the merchant, with riskier lines of business paying higher fees.
  • by Payment Network companies to offer cash back rewards or reward points, for spending in specific categories
  • by Payment Network to define rules and restrictions for card transactions (for example, Automated Fuel Dispensers (MCC 5542) have specific rules for authorization and clearing messages).
  • in the United States, to determine whether a payment is primarily for “services”, which needs to be reported by the payor to the Internal Revenue Service for tax purposes, or for “merchandise”, which does not.[2]

Merchant Category Code Privacy Considerations#

Merchant Category Code as with many other codes may be used with or without Informed Consent to:
  • used to market new products to consumers
  • are shared with marketing partners
  • can be subpoenaed

More Information#

There might be more information for this subject on one of the following: