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Understanding High Risk MCC Codes: A Guide on High-Risk Merchant Category Codes

A Merchant Category Code (MCC) is a four-figure number used to categorize business entities according to the type of products or services the company offers. Credit card associations have set up rules dictating merchants in specific high-risk MCC codes to pre-register with these associations to ensure monitoring of risks. 

These high risk categories include industries which primarily cause the highest rates of disputes caused by cardholders or represent risky brands for regulatory purposes. In this blog, we delve into the world of high-risk MCC codes, exploring a range of industry categories that face difficulties in qualifying for merchant accounts.

MCC Code List: Are They Helpful?

The MCC Code List, or Merchant Category Code List, is an essential tool used in the financial industry to classify businesses according to their types of goods and services. Each business is assigned a four-digit code that accurately represents its line of work. 

This comprehensive list enables banks, credit card issuers, and payment processors to accurately identify and categorize transactions for reporting purposes. 

The MCC codes assist in determining where customers’ money is being spent and provide valuable insights into consumer behavior patterns. This information is particularly valuable for risk assessment, fraud detection, and targeted marketing strategies. 

Additionally, the MCC code list plays a critical role in ensuring compliance with regulatory standards by assessing whether certain industries are subject to specific regulations or financial restrictions. As businesses evolve and new industries emerge, the constant review and updating of the MCC code list remains crucial to ensure its relevance in today’s dynamic economic landscape.

What Are High Risk Merchant Category Codes Or High Risk MCC?

High Risk Merchant Category Codes or High Risk MCCs are codes assigned by credit card companies to identify businesses that pose a higher risk to them. These MCCs are assigned to certain industries and businesses that are considered to be higher risk than others, such as those that deal in adult entertainment, gambling, online gaming, travel, pharmaceuticals, and other industries. 

High Risk MCCs are used by the credit card companies to determine merchant fees, processing rates, and other factors that affect the way that merchants interact with their customers. It is important for merchants to be aware of their MCCs, as it may affect their ability to accept certain types of payments, or even to be approved for a merchant account.In addition, some MCCs may be subject to extra scrutiny from the credit card companies, such as more frequent reviews or additional fees. In order to ensure that merchants are able to accept the types of payments they need to in order to keep their businesses running, they should be aware of their MCCs and any applicable fees or restrictions.

What Does Mastercard High Risk MCC Mean?

Mastercard High Risk MCC are a set of codes that categorize businesses based on the level of risk associated with their operations. These codes provide valuable information to financial institutions and payment processors in assessing the risk involved in processing transactions for specific merchant types. 

As mentioned above, high-risk MCCs typically include industries such as gambling, adult entertainment, online gaming, and telemarketing. By assigning these high-risk MCCs to relevant businesses, Mastercard aims to facilitate responsible decision-making when it comes to transaction processing. 

Financial institutions and payment processors can use this information to apply appropriate risk management measures, including enhanced due diligence and greater scrutiny of transactions from merchants falling under these categories. This enables them to identify potentially fraudulent activities or compliance breaches more effectively and protect both consumers and the financial ecosystem overall. The careful monitoring and regulation of high-risk MCCs reflect Mastercard’s commitment to maintaining the integrity of its network while promoting secure and trusted payment solutions worldwide.

A List of High Risk MCC Codes Visa

High Risk MCC (Merchant Category Codes) Visa refers to a specialized payment processing program offered by Visa (VISA Integrity Risk Program -VIRP), to businesses operating in high-risk industries such as gambling, adult entertainment, e-cigarettes, and pharmaceuticals. The same way Mastercard has its classification, this VISA program aims to mitigate the inherent risks associated with these industries by providing a secure and reliable payment solution. 

By categorizing high-risk merchants under a specific MCC code, Visa can ensure that their transactions are closely monitored for potential fraudulent activities or compliance violations. Moreover, the High Risk MCC Visa program enables merchants to access specialized underwriting and risk management services tailored to their unique needs. 

The following is a list of VISA MCC codes that need high-risk registration and many other business categories where retailers find it difficult to qualify for merchant accounts.

MCC   Merchant Category Code
4722Travel agencies and tour operators
4812Telecom equipment and sales
4814Telecom services
4816Computer network services
4829Wire transfers & money orders
5122Drugs, Proprietaries & Sundries
5912Drug stores and pharmacies
5962Direct Marketing-Travel
5964Direct Marketing-Catalog Merchant
5966DM-Outbound telemarketing
5967DM-Inbound Teleservices
5968Direct Marketing- Subscription
5969Direct Marketing-other
5993Cigar stores and Stands
7273Dating and Escort
7841Video tape rental stores
7994Video games and arcades
7995Betting and casino Gambling
9399Government Services
9754None-Face-to-Face Gambling

As you can see, if your company is high risk, then it’s time you register for risk monitoring. The above table contains a list of visa MCC codes for different industry categories; you must definitely fall in one of the above.

High-Risk Merchant Category Codes – MCC: Key Takeaways

High risk accounts are difficult to acquire because traditional banks are not willing to work with such merchants. Most of them don’t have the right tools in place to reduce associated risks and have policies that prohibit them from offering services to risky industries.

EMB has made it their responsibility to offer a range of local and offshore merchant accounts to all low risk and high-risk merchants. Not only that, it also has acquired bank partnerships, skills and a good reputation to help your high risk business acquire a merchant account. 

EMB offers services that include chargeback mitigation tools, fraud detection systems, and enhanced security measures to safeguard both the merchant and the cardholder’s interests. As a result, businesses in high-risk industries can process payments seamlessly while complying with stringent regulatory requirements imposed by financial institutions and government authorities.

High risk Merchant Category Code (MCC) is a four-digit number used to categorize business entities that are deemed high risk due to the type of products or services they offer. These entities typically have higher rates of disputes by cardholders or represent risky brands for regulatory purposes. Businesses in these categories are required to pre-register with credit card associations for risk monitoring.

MasterCard high risk MCC is a classification used by MasterCard for business entities that offer products or services deemed high risk. These businesses have a high rate of disputes or present significant regulatory risks. They are assigned a specific Merchant Category Code (MCC), and they are required to pre-register for risk monitoring with MasterCard.

High risk MCC codes for Visa are specific four-digit numbers assigned to businesses deemed high risk due to their products or services. The codes categorize these high-risk entities, and Visa requires them to pre-register for risk monitoring. Examples include industries such as travel agencies, telecom services, direct marketing, and betting and casino gambling, among others.

High risk merchant category codes are unique four-digit numbers assigned to businesses operating in industries deemed high risk. These codes are used to categorize these entities according to their products or services. Businesses in these categories are often subject to higher rates of disputes by cardholders and can represent risky brands for regulatory purposes. They are required to pre-register for risk monitoring with credit card associations.

The MCC code list is a comprehensive list of Merchant Category Codes used to categorize business entities based on the products or services they offer. These four-digit numbers are assigned to each business, with specific codes assigned to those considered high risk. Such high-risk entities need to pre-register with their respective credit card associations for risk monitoring.

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