A Merchant Category Code (MCC) is a four-digit number listed in
ISO 18245
ISO 18245 is an ISO standard concerning the assignment of Merchant Category Codes (MCC) in retail financial services.
These are used to control usage of corporate credit cards. MCCs are assigned by merchant type (e.g. one for hotels, one for off ...
for retail financial services. An MCC is used to classify a business by the types of goods or services it provides.
Assignment of MCCs
MCCs are assigned either by merchant type (e.g., one for hotels, one for office supply stores, etc.) or by merchant name (e.g., 3000 for United Airlines) and is assigned to a merchant by a credit card company when the business first starts accepting that card as a form of payment. The same business may code differently with different credit cards, and different sections or departments of a store may code differently.
Uses of MCCs
An MCC reflects the primary category in which a merchant does business and may be used:
* to determine the
interchange fee
Interchange fee is a term used in the payment card industry to describe a fee paid between banks for the acceptance of card-based transactions. Usually for sales/services transactions it is a fee that a merchant's bank (the "acquiring bank") pay ...
paid by the merchant, with riskier lines of business paying higher fees
* by credit card companies to offer cash back rewards or reward points, for spending in specific categories
* by card networks to define rules and restrictions for card transactions (for example, Automated Fuel Dispensers (MCC 5542) have specific rules for authorization and clearing messages)
* for tax purposes, e.g., in the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
, to determine whether a payment is primarily for “services”, which needs to be reported by the payor to the
Internal Revenue Service
The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory ta ...
for tax purposes, or for “merchandise”, which does not
MCC lookup tools
There are multiple resources credit card users can consult to predict how credit card purchases with given vendors may be categorized. Examples include:
*
*
*
*
*
See also
*
ISO 8583
ISO 8583 is an international standard for ''financial transaction card originated'' interchange messaging. It is the International Organization for Standardization standard for systems that exchange electronic transactions initiated by cardholde ...
*
ISO 18245
ISO 18245 is an ISO standard concerning the assignment of Merchant Category Codes (MCC) in retail financial services.
These are used to control usage of corporate credit cards. MCCs are assigned by merchant type (e.g. one for hotels, one for off ...
*
NAICS Code
The North American Industry Classification System or NAICS () is a classification of business establishments by type of economic activity (process of production). It is used by government and business in Canada, Mexico, and the United States of A ...
*
Standard Industrial Classification
The Standard Industrial Classification (SIC) was a system for classifying industries by a four-digit code as a method of standardizing industry classification for statistical purposes across agencies. Established in the United States in 1937, it ...
References
Credit card terminology
{{business-term-stub