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What is a Merchant Category Code (MCC)?

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 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 if a payment needs to be reported to the Internal Revenue Service for tax purposes.