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Everything You Ever Wanted to Know About High Risk Merchant Category Codes* (*But Were Afraid to Ask)

By Chris Alarie on Sep 21, 2021

Merchant Category Codes (MCC) are an essential but often poorly understood aspect of merchant businesses. These codes are assigned to businesses by the card brands and can have significant effects on how businesses operate and accept payment.

What Are MCCs?

Merchant Category Codes are four-digit numerical codes that identify a business by the kinds of goods and services that it sells. They can be assigned to designate specific businesses or to indicate the general type of business which a merchant operates.

MCCs are categorized by the International Organization for Standardization under ISO 18425 and individual merchants are assigned their MCC by each card brand. It is entirely possible for different card brands to assign different MCCs to the same business or for one business to be assigned multiple MCCs by a card brand, depending on the structure of the business.

MCCs are important for such things as determining the interchange fee that a merchant will pay, enabling card brand rewards programs that relate to spending in specific categories, controlling purchases by category for business credit cards, and determining how purchases are categorized for tax purposes.

How Do I Find My MCC?

The most direct way to find out what MCC your business has been assigned is to contact all of the card brands that you accept as payment. There are also potentially helpful tools such as AwardWallet’s Merchant Category Lookup ToolVisa’s Supplier Locator, and the Visa Merchant Data Standards Manual. It is also possible to find some indication to your MCC by looking at the “transaction category” section in a credit card statement for any purchases made at your business.

What Are High Risk MCCs?

Certain industries and business models are considered “high risk” by the card brands. Card brands may find a particular category of business to be high risk because it has an elevated potential for fraud, it is in a highly regulated industry, it has a tendency toward high numbers of chargebacks, or some other business sector tendency toward risk.

What Are the Consequences of Having a High Risk MCC?

Businesses with high risk MCCs are subject to higher rates for such things as interchange fees and chargeback fees. Businesses with high risk MCCs are often restricted to high risk merchant accounts, which bring their own additional level of fees and regulations. Some card processors may prohibit their customers from doing business with certain industries with high risk MCCs. Similarly, since MCCs are often used to set limits for corporate credit cards, a high risk MCC could potentially prevent a business from accepting payment from certain corporate cards.

How Should I Manage a High Risk MCC?

It depends on whether or not that high risk MCC is an accurate reflection of your business. If you feel that a card brand has inaccurately labeled your business with a high risk MCC, there are methods by which you can attempt to acquire a different MCC. Card companies do allow merchants to request a new MCC code if they feel that their current one does not accurately fit their business and can provide evidence supporting such a claim.

However, if a high risk MCC is an accurate reflection of your business, it would be ill-advised to try to intentionally misrepresent your business. In 2020, two merchants who sold cannabis products online were arrested and charged with bank fraud for selling cannabis products that were intentionally mislabeled with MCCs for such items as dog toys and soda.

Being labeled as high risk is not something that should prevent your business from operating. There are high risk merchant accounts and procedures that high risk businesses can employ in order to manage chargebacks.

High-Risk MCC Codes

MCC Code Title
4722 Travel Agencies, Tour Operators
4812 Telecommunication Equipment and Telephone Sales
4813 KEY-ENTERED TELECOM MERCHANT
4814 Telecommunications Services
4816 Computer Network Services
5122 Drugs, Drug Proprietaries, and Druggist Sundries
5715 ALCOHOLIC BEVERAGE WHOLESALERS
5816 Digital Goods: Games
5912 Drug Stores and Pharmacies
5962 Direct Marketing - Travel
5964 Direct Marketing - Catalog Merchant
5966 Direct Marketing - Outbound Telservices
5967 Direct Marketing - Inbound Tele
5968 Direct Marketing - Subscription
5969 Direct Marketing - Other
5974 RUBBER STAMP STORES/RESERVED FOR NATIONAL USE
5993 Cigar Stores and Stands
6050 QUASI CASH-MEMBER FINANCIAL INSTITUTION
6381 INSURANCE PREMIUMS
6529 REMOTE STORED VALUE LOAD-MEMBER FINANCIAL INSTITUTION
6530 REMOTE STORED VALUE LOAD
6531 PAYMENT SERVICE PROVIDER-MONEY TRANSFER
6532 PAYMENT TRANSACTION - MEMBER FINANCIAL I
6533 PAYMENT TRANSACTION - MERCHANT
6534 MONEY TRANSFER-MEMBER FINANCIAL INSTITUT
6535 VALUE PURCHASE-MEMBER FINANCIAL INSTITUT
6536 MONEYSEND INTRACOUNTRY
6537 MONEYSEND INTERCOUNTRY
6538 MASTERCARD MONEYSEND FUNDING TRANSACTION
6540 POI FUNDING TRANSACTIONS
6555 MASTERCARD INITIATED REBATE/REWARDS
6611 OVERPAYMENTS
6760 SAVINGS BONDS
7012 Timeshares
7272 ESCORT SERVICES
7273 Dating/Escort Services
7280 HOSPITAL PATIENT PERSONAL FUNDS WITHDRAW
7295 BABYSITTING SERVICES
7322 DEBT COLLECTION AGENCIES
7800 GOVERNMENT-OWNED LOTTERIES
7801 GOVERNMENT LICENSED CASINOS ONLINE GAMBLING
7802 GOVERNMENT LICENSED HORSE/DOG RACING
7833 EXPRESS PAYMENT SERVICES - MOTION PICTURE
7841 Video Tape Rental Stores
7994 Video Game Arcades
9399 Government Services (Not Elsewhere Classified)
9401 I-PURCHASING PILOT
9411 GOVERNMENT LOAN PAYMENTS
9700 AUTOMATED REFERRAL SERVICE
9701 VISA CREDENTIAL SERVER
9702 GCAS EMERGENCY SERVICES VISA USE ONLY
9754 GAMBLING-HORSE, DOG RACING-ST LOTTERY