Merchant category code explained

A merchant category code (MCC) is a four-digit number used for retail financial services to classify a business by the types of goods or services it provides. Codes are specified by the ISO 18245 standard.

Assignment of codes

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^[1]) and is assigned to a merchant by a credit card company when the business first starts accepting that card as a form of payment.^[2] The same business may code differently with different credit cards, and different sections or departments of a store may code differently.^[3]

Uses of codes

An MCC reflects the primary category in which a merchant does business and may be used:

• to determine the interchange fee 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^{[4] [5]}
• 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, 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^[6]

Code 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:

• Web site: AwardWallet. AwardWallet Merchant Lookup Tool.
• Web site: Visa Merchant Data Standards Manual.
• Web site: List of MCC codes in CSV, ODS, XLS formats . github. 24 August 2022 .
• Web site: An ISO 18245 python library for MCCs . github. 6 July 2022 .

See also

• ISO 8583
• ISO 18245
• NAICS Code
• Standard Industrial Classification

Notes and References

1. Web site: www.citibank.com. Citibank. Merchant Category Codes.
2. Web site: VISA . USA . Merchant Category Codes . usa.visa.com . dead . https://web.archive.org/web/20070710202209/http://usa.visa.com/download/corporate/resources/mcc_booklet.pdf . July 10, 2007 .
3. News: . Merchant Category Codes: Why They Matter for Credit Card Rewards. Frankel, Robin Saks . El Issa, Erin . August 1, 2019.
4. Web site: December 16, 2015. Welcome to AARP® Credit Card from Chase. Earn 3% Cash Back rewards on restaurant and gas station purchases (Terms). Chase Bank. https://web.archive.org/web/20190207015841/https://creditcards.chase.com/aarp/cardmember/terms_restaurant_gas. February 7, 2019. dead.
5. Web site: December 16, 2015. Credit card rewards that really add up. Discover IT.
6. Web site: Internal Revenue Service. USA. Internal Revenue Bulletin: 2004-31, Rev. Proc. 2004-43, Merchant Category Codes to Determine Reportable Payment Card Transactions . IRS.gov. August 2, 2004 .