merchant category code
{{Short description|Four-digit number listed in ISO 18245 for retail financial services}}
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{{cite web|website=www.citibank.com|publisher=Citibank|title=Merchant Category Codes|url=https://www.citibank.com/tts/solutions/commercial-cards/assets/docs/govt/Merchant-Category-Codes.pdf}}) and is assigned to a merchant by a credit card company when the business first starts accepting that card as a form of payment.{{cite web|publisher=VISA |location=USA |url=http://usa.visa.com/download/corporate/resources/mcc_booklet.pdf |title=Merchant Category Codes |website=usa.visa.com |url-status=dead |archiveurl=https://web.archive.org/web/20070710202209/http://usa.visa.com/download/corporate/resources/mcc_booklet.pdf |archivedate=July 10, 2007 }} The same business may code differently with different credit cards, and different sections or departments of a store may code differently.{{cite news|work=NerdWallet |title=Merchant Category Codes: Why They Matter for Credit Card Rewards|author1=Frankel, Robin Saks |author2=El Issa, Erin |date=August 1, 2019}}
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{{cite web|accessdate=December 16, 2015|url=https://creditcards.chase.com/aarp/cardmember/terms_restaurant_gas|website=Chase Bank|title=Welcome to AARP® Credit Card from Chase. Earn 3% Cash Back rewards on restaurant and gas station purchases (Terms)|archive-url=https://web.archive.org/web/20190207015841/https://creditcards.chase.com/aarp/cardmember/terms_restaurant_gas|archive-date=February 7, 2019|url-status=dead}}{{cite web|accessdate=December 16, 2015|url=https://www.discovercard.com/application/displayLanding?pageFileId=paidsearch-rewards-v2&sc=KE2F&iq_id=r43700008012353043&cmpgnid=ps-dca-yahbing-sl-cashrewards|website=Discover IT|title=Credit card rewards that really add up}}
- 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|date=September 2019}})
- 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{{cite web|publisher=Internal Revenue Service|location=USA|url=https://www.irs.gov/irb/2004-31_IRB/ar17.html|website=IRS.gov|title= Internal Revenue Bulletin: 2004-31, Rev. Proc. 2004-43, Merchant Category Codes to Determine Reportable Payment Card Transactions |date= August 2, 2004 }}
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:
- {{cite web|website=AwardWallet|url=https://awardwallet.com/merchants|title=AwardWallet Merchant Lookup Tool}}
- {{cite web|url=https://usa.visa.com/content/dam/VCOM/download/merchants/visa-merchant-data-standards-manual.pdf|title=Visa Merchant Data Standards Manual}}
- {{cite web|url=https://github.com/greggles/mcc-codes |title=List of MCC codes in CSV, ODS, XLS formats |website=github|date=24 August 2022 }}
- {{cite web|url=https://github.com/jleclanche/python-iso18245 |title=An ISO 18245 python library for MCCs |website=github|date=6 July 2022 }}