Merchant Category Code (MCC) is a four-digit number assigned to businesses by payment card networks such as Visa, Mastercard, and American Express. The MCC categorizes the business based on the type of products or services they offer. MCC codes help payment networks to identify the type of business and the risk associated with it, and to facilitate transactions with merchants.
In the context of businesses using subscription management platforms, MCC codes are crucial for accurately processing payments and managing subscription billing. SaaS subscription management platforms require accurate and up-to-date MCC codes to correctly categorize businesses, which enables them to apply the appropriate payment processing rules and fees.
For example, subscription billing software may charge different fees depending on the MCC code of the business, which can have a significant impact on the cost of subscription billing for merchants. Additionally, some payment networks may have specific rules and regulations for certain MCC categories, which may affect how subscriptions can be billed and processed.
Ensuring that MCC codes are accurate and up-to-date is essential for subscription management platforms and merchants to operate efficiently and avoid any potential issues with payment processing. Merchants can verify their MCC code by contacting their payment processor or the payment card network directly.
Thus, MCC is a classification system that helps payment networks to categorize businesses based on the type of products or services they offer. These codes are important for subscription management platforms and merchants to accurately process payments and manage subscription billing.