Other factors, such as our proprietary website’s rules and the likelihood of applicants’ credit approval also impact how and where products appear on the site. Generally speaking, each credit card network has its own master list, so some merchants will have a different MCC code with different credit card networks.
However, some networks like American Express and Discover don’t make their code lists publicly available. In that case, your card issuer may provide a list of its network’s MCCs either online or by request if you contact them. The type of business entity is determined when the merchant account initially opens. From there, a business is locked into the MCC code unless their business changes substantially, in which case, they may need to open a new merchant account altogether.
Get Merchant Category Codes (mcc) Correspondence Tables
While you can’t arbitrarily change your merchant category code, the more informed you are, the better opportunity you have to make sure it is correct. If you know ahead of time that you’re classified as a ‘risky business’ you can prepare yourself. Maybe you can change how you structure your sales, or emphasize a certain line of business so that the networks don’t see your business as risky. Payment networks assign the codes, but they affect merchants in big ways. The acquiring banks and PSPs use the codes to determine your risk level, which in turn, determines how much the bank and/or PSP charges you for payment processing.
If the latter, the merchant could then cross-reference the category name with the numeric MCC. Rather than digging through a year’s worth of individual receipts to try and identify reportable information, the merchant can use the contractor’s merchant category code. This lets them quickly and consistently figure out whether business costs are exempt.
- Some MCCs, like those assigned for gambling and money orders, do not receive these protections in transactions where a card is not present.
- A merchant category code is an IRS required 4-digit code that classifies a business.
- Or, call the number on the back of your credit card if you have specific questions.
- Below are some MCCs related to travel and transportation excerpted from Citibank.
- Contact us today to see what we can do to ease the burden of chargebacks.
For instance, only companies classified as healthcare-based organizations can accept health-savings-account cards. Supposing a company is categorized as a grocery store, despite having a convenient pharmacy, a customer’s card might be rejected for pharmaceutical purchases made through a grocery lane. Usually, when this happens, it’s because a cardholder tried to use a card restricted to only specific merchant category codes. EBT cards, reward cards, or health care savings cards fall under this mantle.
Decoding The Mcc: How Merchant Category Codes Determine Merchant Status & More
This hidden knowledge can help you learn what makes your rewards program tick. Read on for the ins and outs of MCCs — and how to earn maximum cash back with your cash back credit card. Host Merchant Services is a registered Independent Sales Organization of Wells Fargo Bank, N.A., Concord, CA. High-risk merchant services provided through Electronic Merchant Systems (EMS). Now that you understand what MCCs are, how they affect businesses and cardholders, and where to find them, let’s look at lists of real MCCs.
- Another possibility is that a credit card issuer fails to give you the correct amount of points or cash back even for a transaction that has an MCC that should trigger the bonus.
- After all, many credit cards offer bonus points on certain types of purchases, yet you may not know how a purchase will code on your credit card statement without knowing the MCC.
- At an early stage of the application process, your account broker picks the most accurate code that reflects your business or service.
- However, the IRS has its own list of MCC codes that you can use to categorize your business.
The payment networks assign businesses the merchant category code (Visa, MasterCard, American Express, and Discover). Each network may have their own ‘tweaks’ to the codes, but they are all similar in the end.
We’ve Made Some Changes To Our Api
As the blog gained in popularity, Ben began directly assisting merchants in their search for a processor. Ben believes in empowering businesses by providing access to fair, competitive pricing, accurate information, and continued support. His dedication to transparency and education has made CardFellow a staunch small business advocate in the credit card processing industry. If you’re not sure what interchange fees are, take a moment to read up interchange fees here. Interchange fees are important because they are collected by banks that issue credit and debit cards, and they account for the vast majority of a business’ credit card processing expense. To find out how a transaction is categorized, just look at your credit card statement.
An online search of “[processor] merchant category codes” should link you to the right place. Or, call the number on the back of your credit card if you have specific questions. Sometimes high-risk businesses are not accepted by a credit card provider at all. For example, if a customer wants to pay for a good or service with their Health Savings Account, or HSA, your business must have the appropriate merchant category code.
ISO’s sometimes try to game the system by misrepresenting a code and classifying your company as a different business. In turn, they will open a merchant account fast, but as a result, they may get in trouble down the line. For example, if a company is selling CBD online, there are specific regulations they will have to follow. [newline]Additionally, banks use them to monitor changes in consumer purchasing habits. From low-risk point-of-sale merchants to registered high-risk merchant accounts (which exclude some categories), PayPrin offers a comprehensive range of domestic and offshore merchant account solutions. PayPrin has the partnerships, experience and reputation to help most high-risk merchants obtain a merchant account. Also, if the merchant in question has any restrictions placed on them due to their MCC code or if they have recently changed merchant status, these situations can be read as MCC code errors.