What is Merchant Category Code?

Legal Definition
A merchant category code (MCC) is a four-digit number assigned to a business by credit card companies (for instance, American Express, MasterCard, VISA) when the business first starts accepting one of these cards as a form of payment. The code reflects the primary category in which the merchant does business and may be used by credit card companies to offer cash back rewards or reward points, for spending in specific categories. Additionally, the MCC is used to classify the business by the type of goods or services it provides. In the United States, it can be used to determine whether or not a payment needs to be reported to the Internal Revenue Service for tax purposes.
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