How the Right MCC Can Slash Your Payment Processing Fees

Merchant Category Codes (MCCs) are four-digit numbers assigned to businesses by payment processors, categorizing them based on the goods or services they provide. While seemingly insignificant, these codes play a crucial role in determining transaction fees and ensuring compliance with card network policies.

The Impact of MCCs on Transaction Fees

MCCs are a key factor in determining interchange fees, which are charged by card networks like Visa and Mastercard for each transaction. Businesses classified as higher risk typically incur higher interchange fees due to the increased likelihood of chargebacks and fraud. Conversely, businesses with lower risk profiles, such as government agencies and educational institutions, often benefit from lower interchange fees due to their consistent transaction volumes and reduced fraud risk.

Compliance and MCC Accuracy

Accurate MCC categorization is essential not only for optimizing transaction fees but also for maintaining compliance with card network regulations. Misrepresenting a business's activities through an incorrect MCC can lead to penalties and even account termination.

Mamo's Role in MCC Optimization

Mamo's technology is designed to accurately categorize businesses and ensure they benefit from the most favorable payment processing rates available. We specialize in assisting businesses in sectors that often qualify for lower interchange fees, including:

• Government, Bill Payment & Utilities: Organizations providing essential services to the public, such as government agencies, utility companies, and bill payment services, often qualify for lower processing fees due to their stable transaction volumes and critical role in public infrastructure.
• Transport: Businesses facilitating the movement of people and goods, including airlines, public transportation systems, and logistics providers, can often access preferential rates due to the high volume and essential nature of their services.
• Real Estate:  Real estate agencies, property management companies, and other businesses involved in property transactions may be eligible for lower fees considering the typically high value and regulated nature of their transactions.
• Education:  Educational institutions, ranging from primary schools to universities, often benefit from reduced processing costs, recognizing their non-profit status and contribution to societal development.
• Supermarkets: Grocery stores and supermarkets, providing essential food and household goods, typically process a large volume of everyday transactions, contributing to their lower risk profile and potential for lower fees.
• Vehicles: Businesses involved in the sale, lease, and maintenance of vehicles, including car dealerships, motorcycle retailers, and boat dealerships, may qualify for specialized MCCs with lower associated costs.
• Insurance: Insurance companies and brokers, offering financial protection and risk management services, can potentially access lower processing fees due to the regulated nature of their industry and the recurring nature of many insurance payments.
• Commercial large ticket: Businesses engaged in high-value commercial transactions, such as industrial equipment suppliers, technology providers, and wholesale distributors, can benefit from tailored payment solutions and potentially lower fees designed for their specific needs.

Contact our team today to learn more about how to leverage Mamo's expertise in MCC categorization. Businesses in these sectors can optimize their payment processing operations and reduce transaction costs, ultimately contributing to improved financial performance.