MCC Classification
What is MCC Classification?
The Merchant Category Code (MCC) is a four-digit number assigned to describe a merchant's primary business based on annual sales volume. MCCs are fundamental to payment processing, determining interchange rates, compliance requirements, and fraud risk assessment.
Why MCC Classification Matters
Accurate MCC classification is critical for payment processors and acquiring banks. Misclassified merchants can indicate transaction laundering, fee evasion, or attempts to process high-risk transactions under the guise of low-risk businesses.
Common MCC Fraud Patterns
- High-risk hiding as low-risk: Adult content businesses misclassified as dating services
- Fee evasion: Merchants selecting low-fee categories like utilities, charities, or grocery stores
- Prohibited business concealment: High-risk merchants using generic retail classifications
SafetyKit's MCC Classification Process
SafetyKit analyzes merchant websites, product catalogs, and transaction data to determine the appropriate MCC classification. Our AI examines:
- Product types and sales volume by category
- Business model and monetization methods
- Primary vs. secondary business lines
- High-risk business activities requiring mandatory separate MCCs
- Expert disambiguation guidance for ambiguous cases
High-Risk Category Detection
SafetyKit automatically identifies merchants in elevated-risk categories including:
- Adult content and dating services
- Gambling and gaming
- Cryptocurrency and digital assets
- Subscription-based billing
- Digital content platforms
Multiple Category Requirements
SafetyKit identifies merchants requiring separate classification for different business lines:
- Fuel and Convenience: Separate categorization for fuel vs. retail goods
- Cryptocurrency Operations: Distinct classification required for digital asset transactions
- Money Services: Separate categorization for remittance and transfer services
- Gambling Operations: Distinct classification required for all gaming transactions
Customer Success Story
Fortune 500 payments platform solved MCC assignment challenges:
A leading software payments company onboarding millions of sellers per year struggled with MCC assignment, leading to poor interchange rates, manual review bottlenecks, and suboptimal user experience. SafetyKit's instant MCC model performs automated handling of almost all cases.
Results:
- 45% automated MCC accuracy → 98% automated MCC accuracy
- Eliminated manual review bottlenecks
- Improved merchant onboarding experience
- Reduced interchange rate disputes
The SafetyKit Advantage
Traditional MCC review requires manual analysis of each merchant. SafetyKit automates this process using AI that understands card network rules, analyzes website content, and cross-references transaction patterns to detect misclassification instantly.
Detection at Scale
Review thousands of merchants per day with consistent, expert-level MCC classification. SafetyKit flags misclassified merchants before they process a single high-risk transaction, protecting payment processors from fines, chargebacks, and reputational damage.
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