When you set up a merchant account in Singapore to accept credit or debit card payments, your business is assigned a four-digit number you may not even be aware of. This is your Merchant Category Code (MCC). While it might seem like a simple administrative detail, this code has a significant impact on your business operations, from the fees you pay to your risk profile and even your customers’ credit card rewards.
Understanding what an MCC is, how it’s assigned, and why it matters is essential for any Singaporean business owner. It’s a core component of the global payments ecosystem.
This guide will provide a clear breakdown of what MCCs are, why they are so important, and how you can find the specific code assigned to your business.
Key Takeaways
- What It Is: An MCC is a four-digit number used by card networks (like Visa and Mastercard) to classify a business by the type of goods or services it provides.
- Who Assigns It: Your MCC is assigned by your payment platform or acquiring bank (such as DBS or OCBC) when you open your merchant account — you do not choose it yourself.
- Why It Matters in Singapore: Your MCC directly impacts:
- Payment Processing Fees: It influences the interchange rates you pay.
- Risk Assessment: Banks use it to evaluate your business’s risk profile.
- Customer Rewards: It determines if shoppers earn bonus points on cards from DBS, UOB, OCBC, etc. (e.g., “5x points on dining”).
- How to Find Yours: Check your merchant account agreement or contact your payment platform provider directly to confirm your MCC.
What is a Merchant Category Code (MCC)? A Deeper Dive
A Merchant Category Code (MCC) is a global standard used by the card payment industry. Major card networks (like Visa and Mastercard) maintain a list of these codes to classify merchants into specific industries.
Think of it as a “business classification code” for payments.
- 5812 = Eating Places and Restaurants
- 5411 = Grocery Stores, Supermarkets
- 7298 = Health and Beauty Spas
- 5732 = Electronics Stores
This four-digit code allows banks and payment platforms to instantly understand the nature of a transaction.
Who Sets the MCCs?
The MCC lists are established and maintained primarily by the major card schemes. When you apply for a merchant account in Singapore, your payment platform (the acquirer) is responsible for reviewing your application and assigning the MCC that most accurately describes your primary business activity.
Why Your MCC is So Important for Your Business
This simple code has a surprisingly large impact on your finances and operations.
1. It Directly Affects Your Payment Processing Fees
This is the most significant impact. The fees you pay for card processing are bundled into a Merchant Discount Rate (MDR). A large part of that MDR is the interchange fee, which is the fee paid to the customer’s bank.
These interchange fees are set by card networks and are different for every MCC. Industries considered lower risk (like supermarkets, MCC 5411) often have lower interchange rates, while industries considered higher risk (like online gambling, MCC 7995) have higher rates.
2. It Determines Your Business’s “Risk Profile”
Acquiring banks use the MCC to categorize your business based on its associated risk level. A business in a high-risk category (e.g., one with a history of high chargebacks) may face stricter terms, higher fees, or may even be declined for a merchant account.
3. It Enables Customer Credit Card Rewards
MCCs are the mechanism behind most Singaporean credit card reward programs. When a bank like UOB or DBS offers “8% cashback on dining,” their system identifies qualifying purchases by looking for transactions with an MCC of 5812 (Restaurants). If your business is miscategorized (e.g., a bakery is coded as 5411 – Groceries instead of 5462 – Bakeries), your customers may not receive the rewards they expect, which can lead to disputes.
4. It Can Impact Tax Reporting
In Singapore, the Inland Revenue Authority of Singapore (IRAS) may use MCC data during an audit to benchmark your declared revenue and GST submissions against industry averages for your category. An incorrect MCC could raise unnecessary red flags.
Did You Know?
While MCCs are the global standard for classifying card transactions, Singapore’s national payment rail PayNow works differently.
Since PayNow is a direct bank-to-bank transfer, it does not use the MCC framework and has no interchange fees.
However, modern payment platforms still assign an MCC to PayNow transactions internally to maintain consistent reporting, analytics, and reconciliation across all payment methods.
How to Find Your Merchant Category Code (MCC)
Since your payment platform assigns your MCC, you cannot simply look it up on a “complete list.” The best way to find your official MCC is to check with your provider.
Method 1: Check Your Merchant Account Statements
Your MCC is often printed on your monthly statement from your payment platform. Look for a four-digit number near your business name or merchant ID.
Method 2: Review Your Merchant Agreement
The original contract or application you signed when you opened your merchant account will have your approved MCC listed.
Method 3: Contact Your Payment Platform Provider (The Easiest Way)
The simplest and most direct way is to contact your payment platform’s support team. Log in to your dashboard (like the Razorpay Singapore dashboard) or call their merchant support line and ask, “What is the Merchant Category Code assigned to my account?”
Method 4: Look at a Customer’s Credit Card Statement
As a last resort, you can make a small purchase from your own store and check how your business name and business type are listed on your personal credit card’s online statement.
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Conclusion
Your Merchant Category Code is a vital piece of your business’s financial DNA. It influences your processing fees, your risk profile, and your customers’ reward-earning potential. While you can’t typically choose your own MCC, it’s crucial to ensure your business is categorized correctly. If you believe your MCC is wrong, speak to your payment platform provider immediately to ensure your business is classified properly and you are paying the correct rates for your industry.
Frequently Asked Questions (FAQs)
Can I choose my own MCC or change it?
Generally, no. Your payment platform assigns your MCC based on your primary business activity as described in your application. If you believe you have been miscategorized, you must submit a request to your platform for a review, but they make the final decision based on card network rules.
What if my business has multiple activities?
Your MCC will be based on your primary source of revenue. For example, if you run a hotel (MCC 7011) that also has a popular public restaurant (MCC 5812), your processor will assign the MCC that represents the majority of your sales. This is why a hotel restaurant bill may sometimes not code as “dining” on a customer’s card statement.
Where can I find a “complete list” of all MCC codes?
There is no single, universally public list. The card networks (Visa, Mastercard) maintain their own lists, which are very similar but can have slight variations. These lists are typically provided to their partner banks and payment platforms, not to the general public.
Does my MCC affect my GST filing?
Indirectly, yes. Your MCC helps categorize your business, which tax authorities (like IRAS in Singapore or LHDN in Malaysia) use for data analysis and industry benchmarking. Ensuring your MCC is correct is part of good financial governance, which simplifies all your tax reporting.
