Merchant category code (MCC)
A four-digit code that card networks assign to a merchant to classify the type of business it does, such as 5812 for restaurants.
In short
- Every card transaction carries the merchant's MCC.
- Businesses use MCCs to restrict company cards and to suggest expense categories.
- An MCC describes the merchant, not what was bought, so it can be misleading.
A merchant category code, or MCC, is a four-digit number that identifies a merchant's line of business. The codes are standardized under ISO 18245 and assigned by the merchant's acquirer when it starts accepting cards. Examples include 5411 for grocery stores, 5812 for restaurants, 5814 for fast food, 4121 for taxis and rideshare, and 7011 for hotels.
Who uses MCCs
- Card networks: to set interchange rates and apply rules for certain categories.
- Issuers: to calculate rewards, such as extra points on dining or travel.
- Businesses: to control spending on company cards, for example by blocking gambling or cash withdrawals, or limiting a card to travel merchants.
- Expense software: to suggest a category for each card transaction.
The limits of MCCs
An MCC describes the merchant, not the purchase. A hardware store's code doesn't say whether the purchase was lumber or a coffee maker. A department store selling everything has one code. A hotel restaurant charge may carry the hotel's code. Merchants that do many things get one code, sometimes a surprising one.
That is why categorizing by MCC alone produces errors, and why itemized receipts are needed for accurate coding and tax treatment.
Worked example
One code, two very different purchases
Two employees make purchases at the same big-box store, MCC 5311 (department stores). One buys $84 of printer toner, the other a $79 gift card. The MCC suggests "Supplies" for both. The itemized receipts show the gift card, which the company's policy doesn't allow on company cards, and it is flagged for review.