Impact of Merchant Category Codes

What is a Merchant Category Code (MCC)?

In 2004, the Internal Revenue Service published IRS Rev. Proc. 2004-43 to standardize 1099 reporting for commercial cardholders.

How does a MCC classification affect my business?

Today, MCC’s are used by financial institutions to classify businesses by market segment and even used by acquiring banks to assess the risk by a certain industry or business type. Most importantly for businesses that process cards or are looking to process cards in the future, properly classifying your business by MCC can potentially save your organization lots of money on interchange fees.

Some common Merchant Category Code classifications with special interchange fees by industry are:

• Retail
• Utility
• Schools
• Petroleum
• Restaurant
• Hotel/Car Rental
• Charitable/Social
• Grocery Store, Supermarkets
• Insurance Sales and Underwriting
• Vending, Unattended and other cashless transactions

Visa Commercial Solutions: MCC for IRS Form-1099

Please consult with a Merchant Bully Certified Payment Professional to see if your organization qualifies for special MCC interchange fees today.


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