What are MCC codes?

When a merchant begins to accept credit cards, the card companies assign a four-digit number to the merchant, detailing its business category. This code is known as the Merchant Category Code. While some merchant category codes are more general, such as Roofing – Contractors, Boat Rentals and Leases, or Florists, some larger corporations have their own unique MCCs, such as major airlines and hotel chains. These codes are used to determine interchange fees between acquiring and issuing banks based on the nature of the industry and the risk it carries.