Card Payments International

What You Need to Know about Merchant Category Code

Card Payments International is a Utah payment processing company established in 1999 to provide UT smartphone processors, online ACH portals, and more. We also take it upon ourselves to educate our business clients to make sure that each business has the best payment processing solution for their budget and their needs. Today we would like to answer some frequently asked questions about merchant category code.


What is a merchant category code?

A merchant category code (MCC) is a four-digit number given to a business by an acquiring bank or institution (which manages the business’s merchant account) when the business begins accepting Visa or MasterCards.


How are MMCs used?

Originally created in 2004 to simplify 1099 reporting for commercial cardholders, MCCs can also reference the business where a purchase was made in order to determine whether a purchase must be reported to the IRS. MCCs also impact interchange fees charged by issuing banks (where the card was issued).


Why are MMCs important?

Aside from cardholder reporting, merchant category codes are used by the major card brands to influence the interchange fees that a business pays, which in turn are used to lower typical credit card processing charges for certain MCC businesses. It is important that your business is correctly categorized to ensure it does not lose potentially lower rates and for reporting purposes.


To learn more about Card Payments International, merchant category codes, or the UT payment processing options available to your business, click here or call us today at (801) 456-8585.