MCC (Merchant Category Code)
A Merchant Category Code is a four-digit number card networks assign to classify what a merchant sells, used by acquirers and issuers to price risk and route transactions. High-risk verticals sit on specific codes, for example MCC 5967 for adult content and direct-marketing services.
The wrong or misrepresented MCC is the single most common reason an account gets frozen mid-life: acquirers monitor transaction patterns against the declared code, and a mismatch can trigger a review that holds 100% of pending settlement until it resolves. Getting the MCC right at onboarding avoids a freeze most operators do not see coming for months.
An acquirer is the bank or financial institution that processes card payments on a merchant’s behalf, settling funds from the card networks into the merchant’s account.
De-risking is a bank’s decision to exit or refuse entire categories of client, rather than assess each business individually, in order to avoid the compliance cost of monitoring them.
Underwriting is the risk-assessment process a bank, EMI, or acquirer runs on an applicant before approval: verifying ownership, source of funds, transaction history, and sector-specific risk factors against the institution’s published or internal risk appetite.
Chargeback ratio is the share of transactions disputed by cardholders against total transaction count in a given month.