MCC

What is MCC?

MCC stands for “Merchant Category Code.” It is a four-digit numeric code used by card networks to identify the type of activity or sector a merchant belongs to that accepts card payments.

This code is used by issuers, acquirers, and card networks as part of the transaction processing and authorization.

How does MCC work?

When a merchant registers to accept card payments, the acquirer assigns an MCC based on its main activity. This code is included in every transaction and allows the different actors in the system to automatically identify the type of business generating the operation.

It is important to note that the MCC does not describe the specific product sold, but the general category of the business.

Why is MCC important?

MCC is key for the proper functioning of the payment ecosystem, as it performs several functions in transaction processing:

Merchant classification

It allows merchants to be identified and grouped according to their activity or sector.

Determination of rates and fees

It influences interchange fee and other fees applied to transactions, as some sectors are considered higher or lower risk for issuers and acquirers.

Expense control and usage rules

Issuers can use MCC to define restrictions or usage rules for corporate cards or expense management programs.

Data management and analysis

It facilitates the collection and analysis of consumption data, helping financial institutions and merchants understand spending patterns and payment behavior.