What are merchant category codes and how do you find one?

Key takeaways:

• A merchant category code (MCC) is a four-digit number credit card companies use to classify spending by the type of goods or services purchased.

• MCCs help Canadian businesses manage spending and expenses, making reconciling transactions easier, controlling budgets, and ensuring compliance with financial policies.

• For Canadian businesses, MCCs simplify tracking and analyzing company spending patterns, providing actionable insights for smarter budgeting and reporting

Want to know what a merchant category code is, how to find one, and how they influence credit card transactions? Read on.

What are merchant category codes?

A merchant category code (MCC) is a four-digit number credit card companies and other financial institutions use to classify spending by the type of goods or services purchased.

They also simplify reporting, enable expense categorization, and help businesses analyze and control their spending patterns.

Why are merchant category codes important for Canadian businesses?

MCCs are significant to businesses in several ways:

🔸 Setting corporate spend controls

Issuers (the financial provider that issued the card being used) can use MCCs to restrict the use of issued cards at certain types of businesses or, conversely, allow the use of cards only at specific business categories.

Canadian businesses can gain control over employee spending by setting MCC-based limits using spend management solutions.

🔸 Classifying transactions

Using merchant category codes simplifies tracking and reporting different types of transactions. For example, a gas station's MCC would differ from an airline's. This classification helps financial institutions understand what a business offers and how to handle payments and fees. For businesses, transaction classification can also help with expense reconciliation. Spend management software often categorizes transactions automatically using merchant category codes.

🔸 Collecting data on company spending

MCCs provide insights into spending patterns, such as transaction amounts and business types. Canadian businesses can analyze MCC-based data to improve decision-making and optimize budgets.

🔸 Supporting cross-border transactions

Merchant category codes can also influence how transactions are processed cross-border. ‌Businesses operating internationally are subject to fees, including currency conversion fees and global acceptance rules.

How do merchant category codes work?

Merchant category codes play a key role in automating and simplifying expense management for Canadian businesses. Each transaction is classified based on the merchant’s MCC, enabling businesses to:

• Automatically categorize expenses by type (e.g., travel, office supplies).

• Gain real-time visibility into spending across all employees.

• Set controls to limit spending by MCC category, ensuring compliance with budgets.

MCCs help businesses streamline financial oversight, improve budget management, and simplify reporting processes, making them an essential tool for modern expense management.

How to find a merchant category code?

You can find a merchant category code through a variety of methods:

• Review expense transactions: MCCs are included in the transaction details on your credit card statements or within spend management solutions like Airwallex. Simply look for the four-digit code tied to each purchase.

• Use your spend management platform: Tools like Airwallex Borderless Cards can automatically categorize expenses using MCCs, making it easy to track spending by category and manage budgets in real time.

• Contact your card issuer or processor: If you’re uncertain about an MCC, your card issuer can provide clarification on the merchant category associated with a transaction.

• Search online: MCC lists are publicly available and can be found online, grouped by industry (e.g., travel, office supplies).

Merchant category codes by industry

Below are merchant category code ranges listed by industry and a few more specific examples.

Control and understand business spend with Airwallex

Just like how merchant category codes can help you categorize and understand individual transactions, Airwallex’s spend management solutions help you understand and reconcile company spending in its totality.

Over 150,000 businesses use Airwallex solutions, such as Borderless Cards and Expense Management, to regain control of their spend and gain visibility into where their money is going.

With Borderless Cards, employee and company VISA cards are created in minutes. Stay in control of all purchases from a single dashboard, in real-time, while also managing expenses and reimbursements in the same place. Accounting software integrations help you reconcile expenses automatically, using merchant category codes to support automated spend categorization.

Gain greater visibility of spend across your global business with Airwallex Spend solutions.