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Among the long list of MCC codes used within payment processing to categorize industry types, a high-risk MCC code indicates a business operates in a high-risk industry. Typically, merchants in high-risk sectors have a harder time obtaining credit card processing services than other businesses—but with credit cards being the most popular form of payment in North America, it’s especially important for merchants to offer them as a payment method.BlueSnap. “20 Payment Method Statistics For Merchants To Keep In Mind“. Accessed on May 4, 2023.
While it can be challenging for businesses within some industries to obtain payment processing services, there are many merchant service providers that cater to high-risk businesses. If you choose the right provider, you will not only obtain credit card processing, but you’ll also gain the tools and resources you need to protect your business from financial threats. This guide lists high-risk MCC codes, outlines their uses, and explains how they can impact your business’s ability to process payments.
What Is a High-Risk MCC Code?
When a business applies for a merchant account, a four-digit merchant category code (MCC) is attached to the account accompanied by a merchant identification number (MID). While the MID identifies an individual merchant, the MCC code refers to a merchant’s industry type.
High-risk merchant category codes correspond to industries carrying an elevated risk of payment processing liability. As such, some merchant account providers avoid businesses with high-risk merchant category codes because they carry higher exposure to chargebacks, fraud, disputes, and other payment issues.
While an MCC code serves a variety of purposes, it’s primarily used by card networks to determine interchange fees, define rules, and offer incentives to merchants within specific industries. Card networks like Visa and Mastercard have specific rules and regulations in place for businesses with high-risk MCC codes. These rules help to mitigate the potential financial risks that cause significant losses to both card issuers and acquiring banks.
For example, some card networks require additional registration for businesses with high-risk MCC codes accepting card-not-present transactions (CNP) because these types of high-risk transactions carry additional liability. By imposing stricter guidelines, card networks aim to protect the entire payment ecosystem while providing merchants with access to secure payment processing.
What Are They Used For?
High-risk MCC codes help communicate a business’s overall risk level to stakeholders within the payment industry. Particularly, merchant account providers use these codes to determine if a business is too risky for its services. Since chargebacks and fraud account for more than $17 billion in losses for merchants each year, naturally, merchant account providers are exposed to this risk too.Citcon. “7 Chargeback Statistics Merchants Need to Know“. Accessed on May 4, 2023.
While conventional banks usually avoid servicing riskier merchants in an effort to decrease their liability, providers that have more risk tolerance may still require certain stipulations for high-risk merchants, such as mandatory reserve accounts. These practices may seem harsh, but they can significantly lower the impact of financial loss for business owners.
List of High-Risk MCC Codes
Below is an inexhaustive list of each high-risk industry and its correlating merchant category code:
|High-Risk Industry (A-F)||MCC|
|Account funding, stored-value card purchases, and prepaid loans (non-financial institution)||6540|
|Agricultural and farming products||763|
|Aircraft and aviation||4582|
|Airlines, not elsewhere classified||4511|
|Alcohol and tobacco products||5921|
|Alcoholic beverage wholesalers||5715|
|Arms and ammunition||3489|
|Auto sales and repair services||753|
|Bail bonds and legal services||7392|
|Bankruptcy attorneys and services||8111|
|Bitcoin and cryptocurrency||6051|
|Cannabis and marijuana products||8398|
|Collection agencies and debt recovery||7321|
|Computer network services, internet access, cyberlocker, file sharing, and cloud storage||4816|
|Construction and contracting services||1520|
|Credit repair and debt relief||7276|
|Dating and matchmaking services||7273|
|Debt collection and consolidation||7320|
|Debt, marriage, and personal counseling services||7277|
|Digital goods – games||5816|
|Direct marketing – other, not elsewhere classified||5969|
|Direct marketing – outbound telemarketing||5966|
|Direct marketing – subscription, continuity/subscription merchants||5968|
|Document preparation and filing services||7399|
|E-cigarettes and vaping products||5993|
|Education and tutoring services||8299|
|Electronics and computer hardware||5732|
|Energy and utilities||4900|
|Event planning and ticket sales||7991|
|Fantasy sports and online gaming||7995|
|Financial investments and securities||6211|
|Firearms and accessories||4214|
|Foreign exchange and currency exchange||6050|
|High-Risk Industry (G-Z)||MCC|
|Gambling and online casinos||7995|
|Guns and firearms||3489|
|Healthcare and medical services||8099|
|Horoscopes and fortune telling||7999|
|Hospitality and travel industry||4722|
|Industrial and manufacturing products||5085|
|Insurance and health benefits||6300|
|Intellectual property and trademark services||7399|
|Jewelry and luxury goods||5094|
|Lawyers and legal services||8111|
|Loan and financing services||6012|
|Medical marijuana and dispensaries||8099|
|Multilevel marketing and pyramid schemes||7399|
|Nutritional supplements and vitamins||5499|
|Online dating and social networking||7277|
|Online gaming and virtual reality||7995|
|Online pharmacies and supplements||5912|
|Payday loans and cash advances||6051|
|Personal finance and investment advice||6282|
|Pharmaceuticals and prescription drugs||5122|
|Professional and business services||7399|
|Quasi-cash, money orders, and traveler’s checks||6051|
|Real estate and property management||6513|
|SaaS and cloud computing||5734|
|SEO and online marketing services||7392|
|Software and technology industry||7372|
|Sports and recreation industry||7941|
|Stamp and coin stores||5972|
|Tax preparation and accounting services||7278|
|Taxis and limousines||4121|
|Telecommunications and wireless||4814|
|Ticket sales and event planning||7991|
|Timeshares and vacation ownership||7012|
|Travel agencies and services||4722|
|Vehicle sales and financing||5511|
|Virtual and digital goods||5735|
|Web design companies||7375|
|Web hosting and internet services||7375|
|Weight loss and diet products||5499|
|Wine and spirits||5921|
Do You Need a High-Risk Merchant Account?
Businesses with high-risk MCC codes often have trouble accessing merchant services from traditional financial institutions. Fortunately, high-risk merchant account providers offer payment services to merchants with high-risk MCC codes. In doing so, these providers enable businesses in risk-prone industries to access credit card processing, payment gateways, virtual terminal, and other essential payment infrastructure. Additionally, these organizations have first-hand knowledge and expertise of the challenges faced by businesses operating in risky sectors. As such, they offer higher chargeback thresholds, industry-specific support, and other resources specifically tailored to the needs of high-risk businesses.
If your business is assigned a high-risk MCC code, it’s time to explore your merchant account options. When you partner with a reliable high-risk merchant services provider that possesses a deep understanding of your industry, you’ll unlock the level of payment support and account security your business needs.
- BlueSnap. “20 Payment Method Statistics For Merchants To Keep In Mind“. Accessed on May 4, 2023.
- Citcon. “7 Chargeback Statistics Merchants Need to Know“. Accessed on May 4, 2023.