Everything You Need To Know About Merchant Category Codes!

 

Merchant Category Codes (MCC) are the four-digit codes assigned to each merchant by credit card companies and banks. These codes are used to identify the type of business a particular merchant is in, allowing credit card processors to categorize spending for tax reporting and other purposes. For example, an MCC code of 5541 indicates that the merchant is a car rental business, while an MCC code of 5812 indicates that the merchant is a restaurant.


MCC codes are important for businesses to know and use when applying for merchant accounts with credit card processors. Many processors require merchants to provide their MCC codes in order to process payments, as this helps them categorize the type of business and better manage their risks. In addition, certain MCC codes may qualify merchants for special incentives or discounts from the processor.


It’s also important for businesses to understand how their MCC codes can affect the fees they pay to process payments. Some processors have a different fee structure for different MCC codes, and merchants may find that they can save money by using the right code. For example, a merchant processing payments with an MCC code of 5812 (restaurant) may pay lower fees than one who uses an MCC code of 5541 (car rental).


Finally, businesses should also be aware of how their MCC codes can affect the reporting of their sales and transactions to credit card companies. Many credit card companies require merchants to submit detailed transaction reports that include MCC codes, so it’s important for businesses to ensure that they are using the correct code when processing payments.


Overall, having an understanding of Merchant Category Codes can help businesses save money on processing fees and ensure that their transactions are reported accurately. Being aware of these codes can also help businesses qualify for incentives and discounts from credit card processors.  By learning about MCC codes, businesses can maximize the benefits they receive when processing payments with credit cards.

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