Knowing your Merchant Category Code (MCC) helps businesses manage payments. It can lower fees and increase credit card rewards. Correct classification improves customer happiness and business finances.
In today’s world, MCCs are vital for business deals. They help with payments and sorting finances. Business owners, finance pros, and marketers need to know about MCCs. This helps run things better. It also boosts card rewards and ensures rules are followed.
This guide explains:
What an MCC is.
How MCCs function.
Why MCCs matter for companies.
How to find your business’s MCC.
MCCs and credit card rewards.
A list of common MCCs.
How to change your MCC.
Ways to use MCCs wisely.
After reading, you will fully grasp MCC codes. You will learn how to use them for financial gains.
What is an MCC (Merchant Category Code)? An MCC is a four-digit code. Credit card networks like Visa and Mastercard assign it. It sorts businesses by what they sell. These codes help:
Process transactions correctly.
Set payment processing fees.
Group spending for rewards and taxes.
Spot fraudulent actions.
For example, a restaurant might be 5812. A shop could be 5311.
How MCCs Work When you pay with a card, the MCC helps the payment system know the business type. It works like this:
The customer pays.
The system finds the merchant’s MCC.
Fees are calculated using the MCC.
Card companies use the MCC for rewards.
Why MCCs Matter for Businesses
They set transaction fees. Processors charge different fees by MCC. Some businesses pay more than others.
They impact card rewards. Many cards give extra rewards for certain MCCs. If your business is wrong, customers miss rewards.
They help with taxes. MCCs help sort business costs for taxes.
They prevent fraud. Banks use MCCs to find odd spending. A wrong MCC can flag potential fraud.
How to Find Your Business’s MCC You can find your MCC in a few ways.
Look at your merchant statement. Your payment processor usually shows the MCC.
Ask your payment processor. Contact your bank or payment service. They can confirm your MCC.
Use a test purchase. Buy something small at your business. Check your card statement for the MCC.
Search MCC lists. Visa and Mastercard have MCC lists online.
MCCs and Credit Card Rewards Card companies use MCCs for reward groups. Here is how your business can benefit:
Popular Reward Groups by MCC MCC Code | Business Type | Common Rewards 5812 | Restaurants | 3-5% Cashback 5411 | Grocery Stores | 2-6% Cashback 5541 | Gas Stations | 3-5% Cashback 5732 | Electronics Stores | 1-3% Cashback 5912 | Pharmacies | 1-2% Cashback If your business is in a high-reward MCC group, customers may use cards more. This can increase sales.
Common MCC Codes List Here are some common MCC codes:
MCC | Category 0742 | Animal Care 1520 | Builders 1711 | Heating and Cooling 2741 | Printing Services 3000 to 3299 | Airlines 4111 | Passenger Transport 4812 | Phone Services 4899 | TV and Internet 5111 | Office Supplies 6012 | Banks Check Visa or Mastercard for full lists.
Updating Your MCC Code Incorrectly classified businesses may incur higher fees or miss out on rewards. Follow these steps to change your MCC:
Contact Your Payment Processor Ask for an MCC update if your business type has changed.
Submit Proof Provide evidence of your main business activities. This includes your business license, website, or tax records.
Confirm the Update Run a test transaction after the change. This ensures your new MCC is active.
Track Transactions Check that future sales use the correct MCC. This guarantees accurate fees and rewards.
Tips for Better MCC Use
Classify Your Business Correctly Wrong MCCs can cost you more money or rewards. Ask your processor to check your MCC regularly.
Select the Best Payment Processor Some processors focus on specific industries. They may offer better rates for your business type.
Tell Customers About Rewards Highlight credit card rewards linked to your MCC. For instance, “Get 4% back when you shop here!”
Stay Aware of Code Changes MCC codes can be updated. Keep informed to prevent issues.
