Merchant category code

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A Merchant Category Code (MCC) is a four-digit number listed in ISO 18245 for retail financial services. An MCC is used to classify a business by the types of goods or services it provides.

Assignment of MCCs[edit]

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 MCCs[edit]

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[citation needed])
  • 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]

MCC lookup tools[edit]

There are multiple resources credit card users can consult to predict how credit card purchases with given vendors may be categorized. Examples include:

  • "AwardWallet Merchant Lookup Tool". AwardWallet.
  • "Chase Ink Bonus Categories Explained". WalletHub.
  • "Chase Rewards Categories/Chase Rewards Category FAQs". Chase.
  • "List of MCC codes in CSV, ODS, XLS formats". github.
  • "An ISO 18245 python library for MCCs". github.

See also[edit]

References[edit]

  1. ^ "Merchant Category Codes" (PDF). www.citibank.com. Citibank.
  2. ^ "Merchant Category Codes" (PDF). usa.visa.com. USA: VISA. Archived from the original (PDF) on July 10, 2007.
  3. ^ Frankel, Robin Saks & El Issa, Erin (August 1, 2019). "Merchant Category Codes: Why They Matter for Credit Card Rewards". NerdWallet.CS1 maint: uses authors parameter (link)
  4. ^ "Welcome to AARP® Credit Card from Chase. Earn 3% Cash Back rewards on restaurant and gas station purchases (Terms)". Chase Bank. Archived from the original on February 7, 2019. Retrieved December 16, 2015.
  5. ^ "Credit card rewards that really add up". Discover IT. Retrieved December 16, 2015.
  6. ^ "Internal Revenue Bulletin: 2004-31, Rev. Proc. 2004-43, Merchant Category Codes to Determine Reportable Payment Card Transactions". IRS.gov. USA: Internal Revenue Service. August 2, 2004.