Know Your Business MCC and SIC Codes for Credit Card Processing

By Santa Barbara Merchant Services on Jun 13, 2018 at 09:06 AM in Credit Card Payment Processing

Understanding the credit card processing industry can be a little like learning a new language. Merchant Category Code (MCC) and Standard Industrial Classification (SIC) are just some of the necessary acronyms to understand and learn how they might affect your business. 

The SIC code is the first one to understand as this code classifies your industry. These four-digit codes were first developed by the U.S. Department of Commerce in 1937 to classify each industry type. There is a pattern that the SIC codes follow: industry group, major group, and division.

The first three numbers of the code indicate the industry group, and the first two numbers indicate the major group. Each division is made up of a range of SIC codes, i.e. the range from 2,000 to 3,999 is the division Manufacturing. further explains that the SIC system.

The Merchant Category Code (MCC) is another four-digit code, but this one is assigned to merchants through credit card companies (VISA, MasterCard, etc.) when they first start accepting credit cards. It allows the credit card companies to classify what types of goods or services the merchant sells, and how that may affect interchange rates. In the U.S., a business’s MCC can help the IRS determine if a payment needs to be made for tax purposes.

The MCC code is more important to credit card processing because if classified incorrectly you could be charged higher fees based on your type of business. We at Santa Barbara Merchant Services make sure your MCC code is as accurate as possible and classified correctly to get you qualified for your correct rates. 

Feb 28, 2019 Arrow1 Down Reply
Marlon Dania

A business described themselves as a mining company. what MCC should I give them?