MCC stands for Market Category Code, a four-digit classification used in the payments industry to categorize the types of businesses and services that accept credit card payments. In this article, we will explore what MCC is, what it is used for, and provide some examples to help you better understand its importance.
What is MCC?
MCC is a four-digit classification used in the payments industry to categorize the types of businesses and services that accept credit card payments. These codes are used to categorize payments and help card issuers and payment acquirers establish processing fees and card rules for different types of businesses.
MCC codes are based on a classification created by the International Organization for Standardization (ISO) and are used worldwide. There are thousands of different MCC codes, each corresponding to a specific type of business or service.
What is MCC Used For?
MCC is used in the payments industry to help card issuers and payment acquirers establish processing fees and card rules for different types of businesses. Each MCC code is associated with a specific processing fee, and payment acquirers use these codes to establish the rates they charge businesses for accepting credit card payments.
In addition to establishing processing fees, MCC is also used to enforce specific card rules. For example, card issuers may set spending limits for certain MCC codes or restrict the acceptance of certain types of payments in specific locations.
Examples of MCC
Now that we have seen the purpose of MCC, it is helpful to see some concrete examples of how it can be used in practice. Here are a few examples of how MCC is used in different contexts:
Example 1: Restaurant
Imagine a restaurant that accepts credit card payments. The restaurant’s payment acquirer uses a specific MCC code to establish the processing rates for the business. For example, the MCC code 5812 is used for restaurants, and payment acquirers can set specific processing rates for this code.
Example 2: Clothing Store
Now imagine a clothing store that accepts credit card payments. The store’s payment acquirer uses a specific MCC code to establish the processing rates for the business. For example, the MCC code 5311 is used for clothing stores, and payment acquirers can set specific processing rates for this code.
Example 3: Travel Company
Lastly, imagine a travel company that accepts credit card payments. The company’s payment acquirer uses a specific MCC code to establish the processing rates for the business. For example, the MCC code 4722 is used for travel agencies, and payment acquirers can set specific processing rates for this code.
Conclusion
In summary, MCC is a four-digit classification used in the payments industry to categorize the types of businesses and services that accept credit card payments. These codes are used to categorize payments and help card issuers and payment acquirers establish processing fees and card rules for different types of businesses.
Through the aforementioned examples, we can see how MCC is used in different contexts to establish processing rates and enforce specific card rules. From restaurants to clothing stores and travel companies, MCC is an important tool in the payments industry that helps establish fair rates and enforce card rules to ensure the security and efficiency of payment processing.
Ultimately, MCC is an essential tool for any business that accepts credit card payments. By understanding how MCC codes work and how they are used in the payments industry, businesses can ensure they are setting fair fees and complying with card rules to provide a secure and efficient payment experience for their customers.
