The Ultimate Guide to Visa Merchant Category Codes

Merchant Category Codes (MCCs) play a huge role in how your payment system operates, influencing everything from transaction fees to fraud prevention. These codes categorize your transactions, making managing costs easier and streamlining your reporting.

Keep reading to learn more about merchant category codes, why they’re important, and how you can quickly set them up using Stripe in this simple guide.

What is a Merchant Category Code?

A Merchant Category Code (MCC) is a four-digit identifier used by payment processors, banks, and credit card issuers to classify businesses based on the type of goods or services they provide. MCCs ensure that transactions are categorized correctly, which helps in determining fees, taxes, and rewards programs.

For customers, these codes make it easier to recognize the type of business on their credit card statements, providing a quick reminder of where purchases were made. MCCs streamline payment processing and improve transparency for both merchants and consumers.

What are Merchant Category Codes Used For?

Merchant Category Codes (MCCs) are vital for optimizing and securing business transactions. These codes provide crucial information for managing various aspects of payment processing, including:

Determines Interchange Fees

MCCs are essential for determining interchange fees, which are the costs merchants pay for processing credit card transactions. Card issuers set these fees based on the MCC, with different rates for various business categories. Lower-risk categories might enjoy reduced fees, while higher-risk ones face increased costs due to greater fraud potential and chargebacks.

Risk Analysis

MCCs also play a role in assessing risk levels. Payment processors and acquirers use these codes to gauge the potential risk associated with different types of businesses. While the exact formulas used by Visa and Mastercard for risk scoring are proprietary, MCCs are a key factor in this analysis.

Tax Reporting Purposes

For tax reporting, MCCs help classify transactions into categories that may be subject to different tax rates or exemptions. This classification allows accurate reporting and helps businesses determine which transactions need to be reported to the IRS. Typically, only service purchases require reporting, not goods.

Influences Cardholder Fees

MCCs impact cardholder fees, such as annual or foreign transaction fees. Transactions in higher-risk or more costly categories can lead to higher fees for cardholders. This alignment helps issuers manage the financial risks associated with different transaction types.

Prevents Fraud

MCCs are integral to fraud prevention strategies. They enable more precise monitoring and analysis of transactions, enhancing the ability to detect and prevent fraudulent activities. Businesses and payment processors are able to safeguard against suspicious transactions when incorporating MCCs in internal security reviews.

How Merchant Category Codes Work

Merchant category codes (MCCs) are a crucial part of the payment processing system. These four-digit codes classify businesses based on the products or services they offer. Credit card companies, such as Visa and Mastercard, use MCCs to track and restrict spending, gather transaction data, and determine fees. When a business sets up a merchant account, it is automatically assigned an MCC during the underwriting process. In some cases, businesses can request a specific MCC if they meet certain criteria.

MCCs play a significant role in calculating credit card rewards and transaction fees. For example, a business categorized under a low-risk MCC might enjoy lower transaction fees, while a high-risk category could face higher costs. Additionally, MCCs influence the rules and regulations governing how a merchant can process transactions. Understanding and correctly managing your MCC can lead to optimized payment processing and better financial outcomes for your business.

Why MCCs Matter

Merchant Category Codes (MCCs) offer several key benefits that make managing transactions easier and more effective. Here’s how MCCs can help both merchants and payment processors:

Better Fraud Protection

MCCs help detect and prevent fraud by categorizing transactions based on the type of business. For example, high-risk businesses like online gambling get extra scrutiny, making it easier to spot and stop fraudulent activities before they happen.

Easier Tax and Financial Reporting

MCCs simplify the process of tracking and reporting expenses. By grouping transactions into categories like office supplies or travel, businesses can handle their tax filings and financial statements more efficiently.

Clear Transaction Tracking

MCCs provide clear details about each transaction, helping businesses accurately record expenses and income. For instance, a retailer can separate inventory purchases from marketing costs, making financial tracking more precise.

Better Rates and Lower Fees

With the right MCCs, businesses can get better rates and lower fees for payment processing. Lower-risk categories often enjoy reduced processing costs compared to higher-risk ones, making transactions more cost-effective.

Useful Payment Data

MCCs give valuable insights into spending habits and business performance. For example, a restaurant seeing a lot of transactions in the “dining” category can use this information to create targeted offers and attract more customers.

Controlled Spending Limits

MCCs allow businesses to set spending limits and manage card use. For instance, a company can limit card transactions to office supply categories and block high-risk transactions like online gambling.

Accurate Spending Tracking

MCCs track where cardholders are spending their money. This helps businesses ensure that rewards, like cashback on office supplies, are given accurately based on the MCC data.

Effective Reward Programs

MCCs are important for running successful reward programs. For example, if a business offers cashback for purchases at technology stores, the MCC helps ensure that only suitable transactions are rewarded.

Visa's Merchant Data Requirements

Choosing a Merchant Name

Your merchant name isn’t just a label—it’s the key to your customers recognizing and trusting their transactions. A clear and accurate merchant name helps prevent misunderstandings and reduces the chance of disputes. This boosts customer confidence and saves time and money for acquirers, issuers, and merchants by cutting down on unnecessary reviews and inquiries.

Picking a Merchant Location

The correct merchant location is important for accurate transaction processing. The acquirer assigns this location, and it must be consistently reflected throughout the transaction. For card-present purchases, the location is recorded at the point of sale. Card-absent transactions, such as online or phone orders, should be clearly communicated and maintained in all records—from authorization to clearing to chargebacks.

How to Set Up Visa Merchant Category Codes via Stripe

Stripe is a payment processing platform that helps businesses handle online payments smoothly. It also provides tools for managing your Merchant Category Code (MCC) with Visa. Here’s how you can get your Visa MCC through Stripe in a few steps:

Log In to Your Stripe Account: Begin by logging into your Stripe dashboard using your credentials.
Navigate to Account Settings: From the dashboard, go to the “Account Settings” section. This is usually found in the sidebar or under your account profile.
Access the Connected Accounts Section: In the Account Settings, find the “Connected Accounts” tab. This is where you manage settings for accounts that are linked to your Stripe account.
Select Your Connected Account: Choose the connected account for which you want to set or update the MCC. If you only have one account, it will be selected by default.
Edit Account Information: Click on the option to edit or update the account information. Look for the section labeled “Merchant Category Code” or similar.
Enter Your MCC: Enter the Visa MCC that corresponds to your business type. If you’re unsure which MCC to use, refer to Visa’s guidelines or consult Stripe’s documentation for guidance on selecting the appropriate code. If you’re unsure which MCC to use, refer to Visa’s merchant category code list to find the appropriate code for your business type.
Save Your Changes: After entering the MCC, make sure to save or update the information. This ensures that the new code is recorded in Stripe’s system.
Verify Your MCC: It’s a good idea to double-check that the MCC has been correctly updated. You can do this by revisiting the account settings or contacting Stripe support if needed.

Visa Merchant Category Code Examples

Here’s a quick look at how Visa sorts different types of businesses using MCC codes. This chart breaks down the categories and code ranges, making it easy to see how various businesses are classified.

Category	MCC Range	Description
Airlines and Travel	3000-3299	Airlines and Airline-related Services
Travel Agencies	3500-3799	Travel Agencies and Tour Operators
Automotive	3400-3499	Automotive Parts and Accessories
	3500-3599	Gas Stations
Retail	5200-5299	Home Improvement Stores
	5300-5399	General Merchandise Stores
	5400-5499	Grocery Stores
	5600-5699	Clothing and Shoe Stores
	5700-5799	Furniture Stores
Restaurants and Dining	5810-5819	Restaurants
	5820-5829	Bars and Clubs
Professional Services	8000-8099	Medical and Health Services
	8100-8199	Legal and Accounting Services
Entertainment and Leisure	7800-7899	Entertainment and Recreational Services
	7900-7999	Gambling and Betting
Transportation and Shipping	4111-4112	Taxi Services and Limousines
	4214-4215	Courier Services and Shipping
Utilities and Services	4900-4999	Utilities (Electric, Gas, Water)
	7600-7699	Miscellaneous Services (e.g., Postal Services)

Merchant Examples and Alternative MCCs

Merchant Category Codes (MCCs) are necessary for classifying businesses in the payment process. Sometimes, a business can fall into more than one category depending on the services it offers, which is where alternative MCCs come into play. Choosing the right MCC can make a difference in transaction fees and how your business is assessed for risk. Here are some examples of businesses and their MCCs, along with possible alternatives.

MCC	Merchant Category	Examples	Alternative MCCs
0742	Veterinary services	Animal hospitals, pet clinics	5995 - Pet shops, pet foods, and supplies
0763	Agricultural Co-operatives	Farm services, vineyards	0780 - Landscaping 4225 - Public warehousing
0780	Landscaping and horticultural	Lawn care, garden services	5193 - Florist supplies 5261 - Garden supply stores
1520	General contractors (Residential and commercial)	Construction, building contractors	1711 - HVAC contractors 1731 - Electrical contractors 1740 - Masonry, stonework, tile setting contractors 1750 - Carpentry contractors 1761 - Roofing, siding, and sheet metal contractors 1771 - Concrete work contractors
1799	Special trade contractors	Swimming pool builders, glasswork	1520 - General contractors 1731 - Electrical contractors
1711	Heating, plumbing, and air conditioning contractors	Air conditioning contractors, heating contractors, plumbing contractors	1520 - General contractors 5074 - Plumbing and heating equipment and supplies 1799 - Special trade contractors
2741	Miscellaneous publishing and printing	Bookbinding services, printing services, publishing services	5192 - Books, periodicals, and newspapers 5941 - Book stores 7338 - Quick copy, reproduction, and blueprinting services
2791	Typesetting, plate making, and related services	Plate making services	2741 - Miscellaneous publishing and printing 7338 - Quick copy, reproduction, and blueprinting services
2842	Specialty cleaning, polishing, and sanitation preparations	Cleaning preparations materials, polishing preparations, sanitation preparations	5085 - Industrials supplies 5169 - Chemical and allied products
4112	Passenger railways	Railways - passenger trains	4011 - Railroads 4789 - Transportation services
4199	Ambulance services	Air ambulance services, emergency vehicle services	8099 - Medical services and health practitioners 4789 - Transportation
4215	Courier services	Air or ground courier services, Freight forwarders, courier services	4214 - Motor freight carriers and trucking (local and long) 9402 - Postal services (government only) 4411 - Steamship and cruise lines
4468	Marinas, marine service, and supplies	Harbors, yacht harbors,	4457 - Boat rentals and leasing 7999 - Recreation services
4511	Airlines and air carriers	Airlines/Air carriers that do not have a specific MCC	3000-3350 - Individual airline MCCs
4812	Telecommunication equipment and telephone sales	Cellular telephone equipment, Pagers, paging equipment	4814 - Telecommunication services, including local and long-distance calls, credit card calls through use of magnetic stripe reading telephones, and fax services
4829	Money transfer	Wire transfer	4821 - Telegraph services 6051 - Non-financial institutions, foreign currency, liquid and cryptocurrency assets
4900	Utilities – electric, gas, water, and sanitary	Electric utilities, garbage collectors, gas utilities, public utilities, sanitary utilities	4814 - Telecommunication services, including local and long-distance calls, credit card calls through use of magnetic stripe reading telephones, and fax services
5013	Motor vehicle supplies and new parts	Automobile – motor vehicle supplies, new parts	5532 - Automotive tire stores 5533 - Automotive parts and accessories stores 7531 - Automotive body repair shops 7538 - Automotive service shops (non-dealer)
5044	Photographic, photocopy, microfilm equipment and supplies	Copy services – photographic, photocopy, microfilm supplies equipment – photographic, photocopy, microfilm equipment, supplies microfilm supplies photocopy supplies supplies – photographic, photocopy, microfilm equipment, supplies	5021 - Office and commercial furniture 5045 - Computers and computer peripheral equipment and software 5943 - Stationery stores, office, and school supply stores 5946 - Camera and photographic supply stores 7338 - Quick Ccpy, reproduction, and blueprinting services 7395 - Photofinishing laboratories and photo developing
5111	Stationery, office supplies, printing and writing paper	Business supplies (stationery, office, printing, writing supplies) Office supplies Printing supplies	5021 – Office and commercial furniture 5044 - Photographic, photocopy, microfilm equipment and supplies 5943 - Stationery stores, office and school supply stores 5978 - typewriter stores - sales, rentals and services
5122	Drugs, drug proprietaries, druggist sundries	Distributors - drugs, druggists’ sundries Pharmaceuticals supplies - drugs, drug proprietaries, druggist sundries	5047 - Medical, dental, ophthalmic and hospital equipment and supplies 5912 - Drug stores and pharmacies
5200	Home supply warehouse stores	Warehouse stores - home supply	5211 - Lumber and building materials stores 5231 - Glass, paint, and wallpaper stores 5251 - Hardware stores 5713 - Floor covering stores
5300	Wholesale clubs	Club stores - wholesale clubs Discount goods - wholesale clubs Warehouse retail - wholesale clubs	5200 - Home supply warehouse stores 5310 - Discount stores 5311 - Department stores 5331 - Variety stores 5399 - Miscellaneous general merchandise 5712 - Furniture, home furnishings, and equipment stores, except appliances 5719 - Miscellaneous home furnishing specialty stores
5399	Miscellaneous general merchandise	General merchandise - miscellaneous	5300 - Wholesale clubs 5310 - Discount stores 5311 - Department stores 5331 - Variety stores 5931 - Used merchandise and secondhand stores
5441	Candy, nut, and confectionery stores	Chocolate shops, confectionary shops, dried fruit shops, nut shops, popcorn stands	5451 - Dairy product stores 5462 - Bakeries 5499 - Miscellaneous food stores (convenience stores and specialty markets)
5561	Camper, recreational, and utility trailer dealers	Accessories (RVs) camper dealers, dealers (recreational)	5571 – Motorcycle shops and dealers 5592 – Motor home dealers 5598 – Snowmobile dealers 5599 – Miscellaneous automotive, aircraft, and farm equipment dealers
5722	Household appliance stores	Sewing machine stores, vacuum cleaner stores	5712 - Furniture, home furnishings and equipment stores, except appliances 5719 - Miscellaneous home furnishing specialty stores 7623 - Air conditioning and refrigeration repair shops 7629 - Electrical and small appliance repair shops 7699 - Miscellaneous repair shops and related services
5968	Direct marketing - continuity/subscription merchant	Magazine subscription (direct mail only), direct mail merchants	4900 - Utilities (electric, gas, water, sanitary) 5621 - Women’s Ready-to-Wear Stores 5499 - Miscellaneous food stores (convenience stores and specialty markets) 5969 - Direct marketing (other direct marketers) 5977 - Cosmetic stores 6300 - Insurance sales underwriting and premiums 7997 - Membership clubs (sports, recreation, athletic), country clubs, and private golf courses
6211	Security brokers/dealers	Bond dealers, investment firms (dealers, brokers), mutual funds brokers, stockbrokers	6010 - Financial institutions (manual cash disbursements) 6012 - Financial institutions (Merchandise, services, and debt repayment)
7032	Sporting and recreational camps	Boys’ camps, dude ranches, nudist camp	7033 - Trailer parks and campgrounds 7999 - Recreation services
7298	Health and beauty spas	Tanning salons	7011 - Lodging (hotel, motels, resorts, central reservation services) 7297 - Massage parlors 7299 - Miscellaneous personal services
7832	Motion picture theaters	Cinemas, entertainment (movie theaters), films (movie theaters), movie theaters	7841 - DVD/Video tape rental stores 7922 - Theatrical producers (except motion pictures) and ticket agencies
8011	Doctors and physicians	Cosmetic surgeons, dermatologists, gynecologists, medical professionals (doctors), neurologists, obstetricians, orthopedists, pediatricians, physicians, plastic surgeons, psychiatrists, radiologists, surgeons	8021 - Dentists and orthodontists 8031 - Osteopaths 8041 - Chiropractors 8042 - Optometrists and opthalmologists 8043 - Opticians, optical goods, and eyeglasses 8049 - Podiatrists and chiropodists 8099 - Medical services and health practitioners
8220	Colleges, universities, professional schools, and junior colleges	Community colleges, graduate schools	8211 - Elementary and secondary schools 8241 - Corresponde schools 8244 - Business and secretarial schools 8249 - Vocational and trade schools 8299 - Schools and educational services
8661	Religious organizations	Chapels, churches, mosques, synagogues, temples	8398 - Charitable social service organizations 8641 - Civic, social, and fraternal organizations 8699 - Membership organizations
9311	Tax payments	Customs bureaus	9399 - Government services

Suppose you run a candy store and are currently using MCC code 5441. If you’re experiencing credit card declines a lot, switching to MCC code 5499 for miscellaneous food stores could help, as it might offer a broader and less risky classification that can improve transaction approvals.

Switching to a lower-risk MCC code can improve your transaction approval rates. MCC codes classify businesses based on their activities, and lower-risk codes are considered safer, leading to higher approval rates from banks and payment processors.

It’s common for merchants to change their MCC codes to improve their transaction success. If you’re facing frequent declines, updating your MCC could help increase your approval rates and drive more successful sales.

New MCC or MCC Change Requests

If you need a new Merchant Category Code (MCC) or want to change your current one, follow these simple steps:

Fill Out the Request Form: First, complete the Visa Merchant Category Code Request Form. You can find this form on the Visa Online portal or download it directly here.
Submit the Form to Visa: Send your completed form to Visa. Make sure all the details are accurate to avoid delays.
Wait for Visa’s Decision: Visa will review your request and let you know their decision. If your request is approved, the new MCC or the change to your existing MCC will be updated in the next edition of the Visa Merchant Data Standards Manual.

How to Identify Low-Risk Merchant Category Codes

Low-risk MCCs are codes assigned to businesses that typically have fewer problems with fraud and chargebacks. Think of them as the “good guys” in the transaction world. Common low-risk MCCs include:

Retail Stores: Places like clothing boutiques or electronics shops.
Professional Services: Businesses such as medical offices or legal firms.
Restaurants: Family-owned diners or local cafes.

How to Spot Low-Risk MCCs

Look at Transaction Patterns: Check your transaction records for stability. Businesses with low-risk MCCs usually show consistent spending patterns and minimal disputes.
Consult Industry Reports: Dive into industry reports or risk assessments. These documents can pinpoint which MCCs are considered low-risk based on the latest data.
Review Visa and Mastercard Guidelines: Look at Visa and Mastercard’s guidelines on MCC risk levels. They provide a clear picture of which categories are deemed low-risk.
Watch Fraud Trends: Keep an eye on current fraud trends. Low-risk MCCs generally belong to industries with lower fraud rates.

Are All Merchant Category Codes the Same?

Not all Merchant Category Codes (MCCs) are the same. Different card issuers and processing networks, such as Visa, Mastercard, and American Express, use their own codes to categorize merchants. This means that while many MCCs are standardized and recognized across various networks, there are differences in how some codes are assigned and used.

Despite these variations, most MCCs are consistent enough to ensure smooth processing and widespread recognition, especially for major categories like retail stores or restaurants. So, while there may be some discrepancies, most MCCs function similarly across different payment systems.

Conclusion

Getting your Merchant Category Code (MCC) right is more than a detail—it’s a must for managing chargebacks effectively. The MCC helps ensure transactions are categorized correctly, which can significantly reduce the risk of chargeback disputes. If your MCC is accurate, it makes resolving disputes quickly and accurately easier, minimizing the impact on your business.

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