A guide to MCC codes, TCC codes and MCG groups

12.11.2017

In 1937, the United States government established Standard Industrial Classification (SIC) codes. Now referred to as Merchant Category Codes (MCC) or Transaction Category Codes (TCC), which are a used to categorise businesses by industry based on the goods and services being sold. MCC codes are numbers which usually consist of four digits and relate to a given merchant’s industry. These codes are standardised by the International Organization for Standardization (ISO) based in Geneva, Switzerland and hold the number ISO 18245. MCC codes used to categorise a merchant or business.

Example:

MCC Code	Description
4941	Sporting goods stores

Mastercard further classifies MCC codes with Merchant Category Group (MCG) codes, which is a system of grouping merchant category codes by letters and Transaction Category Codes (TCC) by numbers.

Merchant Category Group (MCG) groups:

Travel
Lodging
Dining and Entertainment
Vehicle Expenses
Office Services and Merchandise
Cash Advance
Other

Transaction Category Codes (TCC) groups:

A Vehicle Rentals

C Cash Disbursements

F Restaurants

H Hotels and Motels

O Hospitals, Education and School Expenses

P Payment Service Providers

R All Other Merchants

R Cardholder Activated Payment Terminals

R U.S. Post Exchange

T Pre-Authorised Mail Orders

T Pre-Authorised Telephone Orders

U Unique Transaction Semi-Cash Disbursements

U Cardholder Activated Terminals

X Railroads

X Airlines

X Transportation

X Travel Agencies

Z Cash Disbursements

An MCC code is assigned to a merchant by an acquiring bank when the business applies for a merchant account in order to start accepting card payments from its customers. MCC codes are used for:

Card brands, card networks, acquiring banks, payment service providers (PSPs) and merchants know which rules to adhere to in relation to their associated MCC code. As an example, MCC 7801 (Betting and Gambling) has different restrictions compared to MCC 6211 (Security Brokers and Dealers).
By credit card companies offering cash back rewards or loyalty points for cardholders spending money on various goods and services (identified by MCC categories).
In some countries, such as the United States, an MCC code can be used to determine whether or not payments need to be reported to the appropriate government tax authority, such as the Inland Revenue Service (IRS).
So issuing banks can block transactions from MCC codes which are banned in relevant countries. For example, MCC 7801 (Betting and Gambling) in the United States.

There are some ambiguities which exist between acquirers when it comes to MCC codes. This is due to the fact that the general public, Independent Sales Organisations (ISOs) or Payment Service Providers (PSPs) and Internet Payment Service Provider (IPSPs) are not granted access to the merchant acquiring rules and guidelines which are provided by card brands (such as Visa, MasterCard and American Express) to its members. This leaves it up to each acquiring bank or member, to interpret the member guidelines as they see fit, resulting in merchants being categorised by one bank under one MCC code and another MCC code by other banks.

Furthermore, there is a constant flow of new businesses and industries being formed where an MCC code does not exist yet. In this case, it is again left up to an acquirer to decide what would suit best. An example of this would be Binary Options, where a customer can bet on the price of a commodity either rising or falling. Some acquirers would classify this as MCC 7995 (Betting and Gambling) whilst others would classify it as MCC 6211 (Security Brokers and Dealers).

To apply for a new standardised MCC code, a form needs to be filled out and sent to the TC 68/ISO, an internal technical committee within the International Organisation for Standardization (ISO). Should a merchant or industry be large enough, then the application for a new standardised MCC code should not be a problem. Large companies such as British Airways (MCC 3005) and Hilton Hotels (MCC 3504) have their own MCC codes to better manage their payment transactions.

Some MCC codes are also classified as high risk, which require merchants who fall under these categories to register with the relevant Card Association (CA). There is an annual registration fee which, depending on the merchant, MCC code and acquiring bank, usually costs between £400 and £950.

High Risk MCC codes:

High Risk MCC Code	Category	Description	TCC	MCG
4722	Travel Agencies and Tour Operators	Travel booking and arrangements, tours and charters	X	1
4812	Telecommunication Equipment	Includes telephone sales	R	5
4814*	Telecom Services	Telephone and cable services	T	5
4816*	Computer Networking	Internet service providers	T	5
4829	Bank Transfers and Money Orders	Bank Transfers and Money Orders	U	5
5122**	Drugs, Drug Proprietaries and Druggist’s Sundries	Drugs, Drug Proprietaries and Druggist’s Sundries	T	7
5912**	Drug Stores and Pharmacies	Drug Stores and Pharmacies	R	7
5962*	Direct Marketing	Travel merchants	T	7
5964	Direct Marketing	Catalogue merchants	T	5
5966*	Direct Marketing	Outbound telemarketing	T	5
5967*	Direct Marketing	Inbound telemarketing	T	5
5968	Direct Marketing	Continuity, subscription and re-billing merchants including audiotext and videotext	T	5
5969	Direct Marketing	Radio, television and other direct Marketers not elsewhere classified	T	5
5993*	Tobacco and Cigar shops	Tobacco products	R	7
7021	Timeshare	Timeshare rental, leases and sales	R	2
7273*	Dating and Escort	Miscelaneous services	R	7
7841*	Video Tape Rentals	Card Not Present (CNP) adult content requires registration.**	R	3
7994*	Video Game Arcades and Skill Gaming	Skill games require registration*	R	3
7995**	Gambling, Betting and Casino	Lottery, Wagers, Casino and Off-Track Betting (OTB)	U	3
9399*	Government Services	Not classified elsewhere. Government lotteries require registration.*	R	7
9754*	Non Face-to-Face Gambling, Betting and Casino	Non Face-to-Face Gambling, Betting and Casino	U	3