MCC Codes Explained: How Your Merchant Category Code Affects Your Business

Your Merchant Category Code (MCC) is a four-digit number assigned by your payment processor that classifies the type of business you operate. MCCs affect your interchange rates, your chargeback liability thresholds, whether you’re flagged as a high-risk merchant, and even what types of cards can be used for purchases. Understanding your MCC — and making sure it’s accurate — is a basic but often overlooked part of payment processing optimization.

How MCCs Are Assigned

MCCs are assigned by your payment processor during the merchant onboarding process based on your business description and website review. The classification follows standards set by Visa and Mastercard and corresponds to categories ranging from “Airlines” (3000-3299) to “Miscellaneous and Specialty Retail” (5999). Processors have some discretion in classification when a business spans multiple categories.

Why Your MCC Matters

Interchange Rates

Different MCCs qualify for different interchange rate schedules. Government, utility, and certain recurring subscription MCCs receive preferential interchange rates. High-risk MCCs may not qualify for the best rate categories.

Chargeback Thresholds

Visa and Mastercard apply different chargeback monitoring thresholds to different MCCs. Standard merchants are monitored at 1% chargeback rate before entering excessive chargeback programs. Some high-risk MCCs may be monitored more closely.

Card Acceptance Rules

Some MCCs restrict which card types can be used. Government-issued prepaid cards and certain corporate cards may have restrictions on which MCCs they can transact with.

High-Risk Flagging

Certain MCCs are flagged as high-risk by processors and card networks — requiring additional underwriting, rolling reserves, or special program enrollment. Common high-risk MCCs include 5912 (Drug Stores), 5122 (Drugs, Drug Proprietaries, and Sundries), and many others.

Common High-Risk MCCs

• 5912 — Drug stores and pharmacies
• 5122 — Drugs, drug proprietaries, and sundries
• 7273 — Dating services and adult entertainment
• 7995 — Gambling transactions
• 5993 — Cigar stores and stands

How to Request a Reclassification

If your MCC doesn’t accurately reflect your business — you’re classified as a general retailer when you primarily sell a specific category that has a more appropriate code — you can request a reclassification from your processor. ConvesioPay’s account management team can review your MCC classification and initiate a reclassification request where appropriate. An accurate MCC can result in lower interchange rates, more appropriate monitoring thresholds, and a better overall processing relationship.