Merchant Category Code (MCC) Basics

Merchant Category Code (MCC) Basics

Know as an MCC, a merchant category code is a term used daily in the payments industry. It is a four-digit code that acquiring banks associate with your merchant account to classify your business’s industry. Visa and MasterCard have their own set of MCC codes, and the code your acquiring bank assigns to you depends on your business industry as well as the card brand you are processing.

For instance, if you own a timeshare business and you process Visa credit cards, your MCC code will be 7012. If you process MasterCard transactions for your shoe store, then your MCC code will be 5661 R. MasterCard includes a single-letter transaction category code, or TCC, that identifies general merchant categories. Visa and MasterCard distinguish nearly 600 different markets and they all have their own code. View a larger list of MCC codes here.

MCC Codes Indicate More Than Your Industry

You may not realize it, but your MCC code can indicate the merchant account fees your acquiring bank may offer you. If you look at similar business types, you will notice that they pay similar discount rates. Although knowing your MCC code will not tell you exactly what your bank will offer, you can get a general idea of what to expect.

Additionally, you can find out what types of products you can offer on your website by knowing your MCC code since they clearly define what you can and cannot sell. This will indicate whether you need multiple merchant accounts.

Should I Have Two Merchant Accounts?

Sometimes, a merchant will offer two very similar products or services, but each will have separate MCC codes (e.g., selling downloadable software as well as offering tech support services). Since the products and services are related, the acquiring bank will use the MCC code for the goods or services that generate more income for the business and allow you to process credit cards through one merchant account.

On the other hand, if you process credit cards for two separate and unrelated MCC codes, you cannot use the same merchant account. For instance, if you have a pharmacy merchant account, you cannot process transactions related to gambling and casinos. For that, you will need a separate casino merchant account.

Protect Your Instabill Merchant Account

When an acquiring bank and credit card processor approve you for a merchant account, they are permitting you to accept credit cards for the goods and services you currently offer on your website. If you process credit cards for unapproved goods or services, it may result in a terminated merchant account.

To protect your merchant account, contact Instabill before making any significant changes to your inventory or services you offer. You will need approval from your merchant account manager as well as from your acquiring bank before selling new items on your site. Keep in mind that drastic changes to your business may require you to apply for a new merchant account.

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