What is MCC Code?

MCC or Merchant category codes was initially used to classify businesses by specific market segments in the IRS publication for tax purposes.

The MCC code is a  four-digit number assigned to a business by an acquiring bank or institution when the business begins accepting credit card payment.

You can find the list of MCC from the IRS website or or from different card providers such as American Express.

For example, 5411 stands for “Grocery Store, Supermarket”. Whereas a gas has might have 2 MCC code, 5541 stands for “Service Station” and 5542 stands for “Automated Fuel Dispensers”.

Why is it important for Merchants?

In short, different MCC code means you pay differently, for the taxes and for the fee you pay to the card service providers. You can find the interchange fee structure from the following links.

American Express: https://merchant.americanexpress.com/accept-card/merchant-account-rates-pricing

Visa:  http://usa.visa.com/download/merchants/visa-usa-interchange-reimbursement-fees-june2012.pdf

Master: http://www.mastercard.com/us/merchant/pdf/MasterCard_Interchange_Rates_and_Criteria.pdf

Discover: http://ctlr.msu.edu/download/cashiers/DiscoverICApr12.pdf

Why is it important for Consumers?

As a consumer it might not affect you as much as a merchant. But sometimes it does.

For example, if you are like me, you might be puzzled why some restaurant accept visa/master only and some accept Visa/Master/Amex. Well, that’s because they charge differently: visa charge 1.5-2.4% + 0.10 and Amex charges 2.9-3.5%+0.05. Some owners simply decided that they can not afford the required margin.

Another example is that when you use the rewards earning credit cards such as American Express Blue Cash Preferred, Chase Freedom. They offer different cash back based on the category of the store (in other words MCC). But be ware they are not always the case, for example, Walmart and Target has MCC 5411 (Grocery Store, Supermarket), but they are counted as “Discount Store” for American Express when it comes to earning rewards.

BTW, If you haven’t take advantage of these rewards earning credit cards yet. I would highly recommend you take a try if you have reasonable credit score. Not only they provide lucrative rewards (6% at grocery store for Amex Blue Cash Preferred) but also they pay out generous signing up bonus. I might devote some future posts on this topic separately.


What is the MCC code for this Merchant?

You can find the merchant’s MCC code from this link.

MCC Codes: What is it and why is it important?
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2 thoughts on “MCC Codes: What is it and why is it important?

  • August 17, 2013 at 5:44 pm

    Does an MCC code designated for a specific merchant, such as a National Brand Merhcant mean they have special rates and fees with the card associations and if they change credit card processor’s, does that rate and fees come over to new processor?


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