A Merchant Category Code (MCC) is a four-digit number used by card networks to classify a merchant based on the type of goods or services they offer. Each merchant is assigned an MCC during onboarding, and this code helps payment processors, acquirers, and card schemes understand what kind of business they’re dealing with.

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MCCs play an important role in risk management, compliance, and transaction routing. Some codes are associated with high-risk industries, which may require additional underwriting or monitoring. For example:

• MCC 7995: Gambling
  
• MCC 5912: Drug stores and pharmacies
  
• MCC 5967: Direct marketing

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Assigning the correct MCC is critical. If a business that sells regulated products  like dietary supplements or age-restricted items  is misclassified under a generic retail code, it could bypass important risk checks and create compliance issues. On the other hand, high-risk MCCs alert providers to potential challenges such as fraud, chargebacks, or regulatory exposure.

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In short, MCCs help acquirers apply the right rules and risk controls from day one by categorizing merchants accurately based on their core business activity, while remaining in compliance with card-brand rules.

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