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What Are Merchant Category Codes (MCCs)?

Merchant Category Codes (MCCs) are a numbering system that merchants and financial institutions may use to identify the primary business of an organization. MCCs can be four digits long and help determine if a transaction should be treated as cash, check or card. For example, the first digit may include 00-09 for restaurants and cafes, 11 for airlines, 15 for hotels and motels, 19 for auto dealerships and 41-49 for department stores.

If you're a merchant looking to accept the payments made via various credit cards or debit cards, then it's important that you understand these MCCs well. These codes allow financial services providers like banks to route transactions to the right payment processing platforms.

Why Is It Important for a Merchant to Understand MCCs?

There are a few reasons why it's important that a merchant understands these MCCs. First, know what kind of payments can be accepted by your business. Second, make sure the transactions from customers using different cards get routed to the right payment processing platform. For example, transactions coming from a department store MCC should be routed to a credit card processor and not necessarily to an ecommerce payment gateway.

Third, some organizations may have very high transaction volume if they deal in various merchant categories e.g. retail and healthcare. Using specific MCCs can help service providers identify a merchant's primary business and offer special pricing benefits.

Does MCC Affect the Pricing of Credit Card Processing Services?

In some cases, yes it can have an effect on your credit card processing services. For example, if you're running a hotel or airline that processes millions of transactions per year then it's likely that you may get discounted rates. This is because the transaction volume you'll be dealing with will automatically classify your business under a high-volume merchant category.

When it comes to payment processors, they set their own rules when it comes to pricing. There are some organizations that offer special features for higher volume merchants including customized reporting panels, revenue protection policies and advanced settlement. It's important that you ask your service provider about their pricing and how you can benefit from it if your MCC places your organization under a high-volume category.

Do High Volume Merchants Pay Less?

However, it should be kept in mind that the MCC only helps the processor identify if they will provide more competitive pricing based on higher volume. This doesn't necessarily mean that you'll pay less, but it's likely that you may be eligible for discounted rates.


For instance, there are some merchant accounts providers who offer tiered pricing plans to merchants based on their revenue or transaction volume. After your business reaches a pre-defined level of annual revenues, you'll be moved to a category which provides special features and discounts.

These providers don't give you lower rates for using their services, but they can provide you with other benefits including increased transaction limits and free equipment, software and PCI compliance solutions. However, it's important that you read the terms and conditions of your service provider before signing up for their services.

Does MCC Reflect the Branding Used by a Company?

Yes, it can have an influence on how you set up your payment portal. For example, if you're using a print credit card processing equipment then your machine should reflect your MCC or else it may be declined during transactions. It's because various payment processing platforms like PayPal, and Stripe check the branding of your payment page before approving transactions.

As a merchant, you will need to provide your bank with the MCC that should be printed on your credit card terminal or gateway. This way even if customers forget their cards at home or don't have one with them, you can still process their payments without any issues.

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