Who assigns merchant category codes?

These codes are assigned by the credit card company who initiates the payment to your merchant account on behalf of their customer. These codes are standard across the industry and based on the merchant name or goods sold. 

What is the MCC code for ecommerce?

Whether doing business in person or online, there is not a standard code for an ecommerce business; instead these codes are mapped to the type of goods or the merchants name to match closer to what is actually being bought and sold. 

Why do merchants need to know their merchant category codes?

It is important to understand your merchant category code as it impacts the fees you may pay on transactions, fees for chargebacks, the rewards category you fit into for customers, and overall the riskiness of your business in the eyes of the credit card processing company. 

How do merchant category codes affect payment processing?

If a customer is trying to purchase something from you utilizing their credit card, and the credit card company has deemed that purchases from the merchant category code are not accepted based on their customer agreement and policy, these charges may decline and the customer will need to utilize a different payment method.

About the Author

Kal Salem

Kal Salem

MA Accounting - Arizona State University

A CPA and finance professional working with small businesses to educate owners and grow alongside their businesses. Kal started his career in public accounting supporting SEC, regulatory, and both internal and external audits. He holds a Masters in Accounting and a BS in Supply Chain Management. Owner at Salem CPA...

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