The Effects of Merchant Category Codes on Credit Card Processing Rates


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Merchant category codes (MCCs) not only classifies your business but also helps in payment processing and better business decision making. So, if your business doesn’t have an MCC code yet you must request one right away. You will be missing out on a lot of things if you don’t have an MCC code. Not every business is entitled to have a merchant category code; some criteria need to be met. So, before applying for the code, you must know these criteria to ensure that your business fits it. Merchant category code affects the credit card processing rates and here we are going to discuss how it does so.

The Effects of Merchant Category Codes on Credit Card Processing Rates

Determine the interchange rates

The credit card companies can determine the interchange rates for businesses. If your business is emerging and not that risky then you will pay less interchange rate. However, if your business falls under the ‘high-risk’ category then the interchange rate will be more.
Find out the high-risk business

When you go to apply for a loan or credit, the credit processing company will identify your business category using the MCC code. Banks will have a difficult time if they give loans to a high-risk business. The banks will charge high for chargeback in case of high-risk business.

Reward calculations

MCC code can help to determine the reward points that customers get when paid using cards. When customers realize that they will get reward points for purchasing goods and services from your company, then they will buy more from you.

Charge convenience fee

If you have an MCC code then you can charge a convenience fee. When customers buy your goods or services through credit cards, you need to bear the processing fees. The convenience fee can compensate for it so you will save a lot of money.

The MCC helps the credit processing companies to assess your business before giving you money. This code helps both the credit companies and your business. Your interchange rate will be low and you may be eligible for a convenience fee. The credit companies will be able to calculate rewards conveniently and determine the category of your business; which is high risk or low risk. You must get an MCC code for your business immediately; otherwise, you will be missing out on lots of opportunities and benefits. Find out the criteria for getting the code and apply for it.


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