⚠️ High-Risk MCCs: What Merchants & PSPs Need to Know

Understanding MerchantMerchant merchant An individual or business that accepts payments in exchange for goods or services. Category Codes and Why They Matter for Risk, Compliance, and Processing Costs
🔗 Published by PaymentsPedia


🧾 What is an MCC?

A Merchant Category Code (MCC) is a four-digit number assigned by card networks (VisaVisa visa A leading global payment technology company connecting consumers, businesses, and banks., MastercardMasterCard mastercard A global payments network enabling electronic transactions between banks, merchants, and cardholders., etc.) to classify a merchant’s primary business activity. For example, 5411 is for grocery stores, while 7995 is for online gambling. These codes help:

  • Acquirers determine underwriting risk
  • Card schemes monitor merchant behavior
  • Set interchange rates and scheme fees
  • Govern legal and compliance obligations (e.g., gambling, pharmaceuticals)

🚩 What Makes an MCC “High Risk”?

Certain MCCs are considered high risk due to one or more of the following:

Risk FactorExplanation
🔁 High chargebackChargeback chargeback A dispute raised by the cardholder that results in reversal of a transaction. Can lead to penalties for merchants. ratesSubscription billing, recurring charges
🎲 FraudFraud fraud Criminal deception involving unauthorized payments or use of financial credentials. vulnerabilityGambling, travel scams, synthetic ID fraud
🔞 Reputational concernsAdult services, tobacco, escort listings
📜 Regulatory restrictionsCrypto, cross-border FX, money remittance
🧾 Scheme-level registrationCard brandsCard Brands card-brands Major payment networks such as Visa, MasterCard, American Express, and Discover that manage transaction routing and rules. require explicit registration & monitoring

Visa and Mastercard maintain MCC directories and require prior registration for many high-risk verticals. You can access the latest MCC list here:


📊 High-Risk MCCs Table

Below is a categorized table of commonly flagged high-risk MCCs by acquiring banks, PSPs, and card schemes. Those marked in red (🔴) require registration with Visa/Mastercard due to risk monitoring regulations.

1. 🧳 Travel & Ticketing

MCCDescriptionRisk Notes
🔴 4722Travel Agencies & Tour OperatorsProne to cancellations, fraud, no-show disputes
5962Direct Marketing – TravelDiscount clubs, telemarketing upsells
🔴 7922Ticketing AgenciesOften includes secondary/resale ticketing

2. 📞 Telecom, Network & Subscriptions

MCCDescriptionRisk Notes
4812Telecom Equipment SalesOften linked to device scams
4814Telecom ServicesBilling fraud and refund abuse
4816Computer Network ServicesIncludes web hosting, ISP, VPN
5966Direct Marketing – OutboundUnsolicited marketing, high chargebacks
5968Direct Marketing – SubscriptionsRecurring billing models
5969Direct Marketing – OtherRadio/TV promotions, push-to-sell methods

3. 💊 Pharma, Drugs, Tobacco

MCCDescriptionRisk Notes
🔴 5122Drugs, Proprietaries & SundriesIncludes online pharmacies (heavily regulated)
5912Drug Stores and PharmaciesIncludes both brick & mortar and e-pharmacies
5993Cigars, Tobacco StoresAge verification, compliance challenges

4. 💻 Digital Content & Adult

MCCDescriptionRisk Notes
🔴 7273Adult Dating & EscortReputational risk, fraud, legal restrictions
7841Video Tape RentalOften coded for adult content sites
🔴 7994Video Games & ArcadesSkill-based gaming requires pre-approval
🔴 7995Gambling, Betting, CasinosOnline casino, lottery, sports wagers

5. 🏠 Real Estate & Timeshare

MCCDescriptionRisk Notes
🔴 7021TimesharesOften flagged due to long dispute windows, misrepresentation

6. 🧾 Government & Remittance

MCCDescriptionRisk Notes
🔴 9399Government Services – LotteriesRequires registration for lottery ticketing
🔴 4829Money Transfers, FX, RemittanceHigh AML/KYC risk, remittance fraud concerns

💡 Pro Tips for Merchants in High-Risk MCCs

TipWhy It Matters
✅ Work with experienced acquirersNot all PSPs are equipped for high-risk MCCs
✅ Ensure clear billing descriptorsReduces chargebacks and confusion
✅ Maintain strong KYC/AML processesEspecially in remittance, adult, or pharma
✅ Get registered with card schemesFor gambling, dating, lottery, etc.
✅ Monitor your MID’s chargeback ratioExceeding 1% can result in shutdown

⚙️ Closing Thoughts

High-risk MCCs don’t mean illegal or unethical—they simply reflect complex regulatory environments and higher operational scrutiny. Merchants must maintain compliance, use robust payment processors, and implement clear refund and dispute policies.

🔍 Want a custom risk analysis or payment strategy for your business category?
📩 Contact PaymentsPedia for High-Risk MCC Advisory

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