MCC (Merchant Category Code) is a four-digit number, based on ISO 18245, that classifies the type of goods or services a merchant sells. The acquirer or payment facilitator assigns it at onboarding from the merchant's main line of business, and it travels in every card transaction message, so issuers, card schemes and cardholder statements all see the category. The code affects interchange rates in several markets, issuer blocks such as 7995 for gambling on corporate cards, and reward exclusions for cash-like payments. Visa's Integrity Risk Program requires acquirers to register high-risk codes, and miscoding a merchant to evade blocks is transaction laundering. In due diligence, the MCC mix of an acquiring portfolio is a quick risk indicator.
How are MCC codes assigned
The acquirer or payment facilitator picks the MCC from the merchant's main line of business during underwriting. A merchant selling across several categories normally gets the code for its largest revenue stream, while marketplaces and payfacs assign one per sub-merchant. Scheme rules require the code to match what the merchant actually sells. Coding a gambling or crypto merchant as, say, a software retailer to get past issuer blocks is transaction laundering, and the acquirer answers for it to the scheme.
Why MCCs matter: interchange, blocks and rewards
The code changes how a payment is treated downstream. In several markets, interchange programmes set different rates by MCC, so supermarkets, utilities or charities can pay less than general retail. Issuers use codes to decline whole categories: corporate and purchasing cards commonly block 7995 (gambling), and some banks block crypto purchases coded 6051 (quasi-cash). Reward programmes exclude codes such as 4829 (wire transfers and money orders) so cardholders cannot earn points on cash-like payments, and budgeting apps and expense tools group spending by MCC.
Which MCCs are high risk
Visa's Integrity Risk Program, which replaced its earlier brand protection programme, groups high-integrity-risk merchants into tiers. Tier 1 covers 5967 (adult content), 7273 (dating and escort services), 7995 (gambling), and 5122 and 5912 (pharmacies). Tier 2 covers 6051 and 6012 for crypto merchants, 4816 for cyberlockers and 5816 for games of skill. Acquirers must register these merchants with Visa, pay a one-time application fee that depends on the tier, and submit annual attestations; Mastercard runs its own registration programme for high-risk categories.
Illustrative example: a PSP onboarding 200 online casinos under 7995 has to register each one, monitor their chargeback ratios against scheme thresholds, and accept that issuers which block gambling will decline those transactions regardless of the cardholder's balance, so its approval rate will sit well below that of a general retailer with the same customers.
What MCCs reveal in due diligence
For a buyer of a PSP, acquirer or EMI with an acquiring book, the MCC mix of the merchant portfolio is a fast risk read. Buyers ask for the share of processing volume in Tier 1 and Tier 2 codes, proof that those merchants are registered with the schemes, and a sample check of codes against merchants' websites. A portfolio concentrated in high-risk MCCs can earn higher margins, but it carries larger rolling reserves, more scheme scrutiny and a greater chance that a sponsor bank or acquirer exits the relationship.