How Your Merchant Category Code (MCC) Impacts Processing Rates

Every merchant account is assigned a Merchant Category Code (MCC) — a four-digit number that classifies your business type. This code is more important than most merchants realize because it directly determines which interchange rates apply to your transactions and can even affect your eligibility for certain programs and rates.

What Is an MCC?

MCCs are assigned by your acquiring bank or processor when your merchant account is set up. They are based on your business type: 5411 for grocery stores, 5812 for restaurants, 5999 for general retail, 7011 for hotels, etc. The code determines how card networks classify your transactions.

How MCCs Affect Interchange Rates

Different MCCs qualify for different interchange rate tiers. Supermarkets (MCC 5411) and gas stations (MCC 5541) enjoy some of the lowest interchange rates because they process high volumes of small transactions. Restaurants (MCC 5812) have their own rate tier. General retail (MCC 5999) has its own category as well.

When Your MCC Is Wrong

If your business is classified under the wrong MCC, you may be paying higher interchange rates than necessary. For example, a fast-casual restaurant coded as general retail (5999) instead of eating establishment (5812) could be paying higher interchange on every transaction. The difference can amount to thousands of dollars annually.

How to Check and Correct Your MCC

1. Look at your processing statement — the MCC is usually listed in the account details section
2. Verify the code matches your actual business type using the IRS MCC reference guide
3. If incorrect, contact your processor to request a reclassification
4. Monitor your statement after the change to verify rates have adjusted

Mogil Partners checks MCC accuracy as part of every statement analysis. A simple code change can save you money on every transaction. Contact us for a free review.