Common MCC Code Mistakes That Can Impact Malaysian Merchants

Key Takeaway:

• An MCC code Malaysia merchants receive identifies their business category to card networks, and getting it wrong creates real problems.
• A wrong MCC code can result in higher processing fees, declined transactions, lost rewards eligibility for customers, and even compliance flags.
• Common mistakes include generic code assignments, outdated codes after business pivots, and mismatches between online and offline operations.
• Payment issues Malaysia merchants face often trace back to MCC misclassification, yet many don’t realise it until problems escalate.
• Choosing a payment provider with proper onboarding helps ensure correct classification from the start, avoiding costly corrections later.

Table of Contents

• Common MCC Code Mistakes That Can Impact Malaysian Merchants
  • What Is an MCC Code and Why Should You Care?
  • How Wrong MCC Codes Hurt Your Business
  • The Most Common MCC Mistakes Malaysian Merchants Make
  • How to Check and Fix Your MCC Code
  • Avoiding MCC Problems from the Start
• FAQs

Every time you accept a card payment, there’s a four-digit number working behind the scenes. That’s your MCC—Merchant Category Code. But what’s special about it?

Card networks like Visa and Mastercard use MCC codes to classify businesses. A restaurant gets one code, a software company gets another, a petrol station gets a different one entirely. The MCC code Malaysia merchants receive determines how card networks and banks view your business, and more importantly, affects your processing fees, which transactions get approved, whether customers earn rewards when paying you, and how banks assess risk on your account.

Even though it’s important, most merchants never think about their MCC code until something goes wrong. And by then, the damage is already done. Here’s what you need to know.

How Wrong MCC CodesHurt Your Business

A wrong MCC code is more than an administrative error, as it creates tangible problems that affect your revenue and customer experience.

Higher Processing Fees

Different MCCs carry different interchange rates, such as between Visa and Mastercard. Some categories, like charities or utilities, get preferential rates. Others, like quasi-cash businesses or high-risk categories, pay more.

If your business is misclassified into a higher-risk category, you’re paying elevated fees on every single transaction. A café incorrectly coded as a bar, for instance, faces higher rates because bars carry more chargeback risk. Over thousands of transactions, that adds up fast.

Transaction Declines

Some card issuers block transactions to certain MCC categories. Corporate cards often restrict entertainment or gambling codes, while a legitimate business software purchase might get declined if you’re miscoded as something the customer’s bank doesn’t allow.

These payment issues Malaysia merchants experience feel random, like customers saying their card “just didn’t work”, but the root cause is often MCC mismatch.

Lost Customer Rewards

Credit cards offer bonus points or cashback for specific categories: dining, travel, and groceries. If your restaurant is miscoded as general retail, your customers don’t earn their dining rewards when paying you. They might not notice immediately, but when they do, it erodes trust.

Compliance and Risk Flags

Banks monitor transaction patterns against MCC codes. A bookshop suddenly processing transactions that look like a money service business raises red flags. Even if you’re operating legitimately, a wrong MCC code can trigger compliance reviews, account freezes, or termination.

The Most Common MCC Mistakes Malaysian Merchants Make

These aren’t edge cases. They happen regularly, often without merchants realising.

Getting Assigned a Generic Code

Typically caused by lazy onboarding, some payment providers default to broad categories like “Miscellaneous Retail” (MCC 5999) when a more specific code applies. A specialty tea shop isn’t generic retail—but without proper classification, that’s what they become.

Generic codes miss out on category-specific benefits and may be scrutinised more because they’re commonly used by fraudulent merchants trying to obscure their actual business.

Outdated Codes After Business Changes

Businesses evolve. A shop that started selling electronics might pivot to phone repairs. A restaurant might add significant catering services. But the MCC code Malaysia payment systems have on file stays frozen at setup.

If your business model has shifted significantly, your original MCC might no longer reflect what you actually do, creating mismatches that accumulate over time.

Online vs Offline Mismatches

Some businesses use different MCCs for their physical stores and e-commerce operations. This isn’t always wrong, but inconsistencies create confusion. A customer buying from your website might get categorised differently than one buying in-store, affecting their rewards and your fees unpredictably.

Accepting the First Code Without Questioning

When onboarding with a payment provider, merchants often accept whatever MCC gets assigned without verifying it’s accurate. The provider might not fully understand your business, or they might default to safer, broader categories to minimise their own risk exposure. This leaves you with a suboptimal classification.

How to Check and Fix Your MCC Code

Finding your current MCC isn’t always straightforward, but it’s possible.

Check Your Merchant Agreement

Your original contract with your payment provider should list your assigned MCC. Dig out the paperwork, or log in to your merchant portal if your provider offers online access to your account details.

Ask Your Payment Provider Directly

A simple support request works. Ask them to confirm your current MCC code and what business category it represents. Take note that it’s a red flag about their service quality if they can’t answer quickly.

Review Customer Statements

Sometimes customers can see MCC codes on their credit card statements or through banking apps. If a regular customer reports that your business shows up in an unexpected category, investigate.

Request a Change if Needed

Changing an MCC isn’t instant—it requires your payment provider to submit a request to the card networks. You’ll need to justify the change with documentation about your actual business activities. The process takes weeks, sometimes longer, but it’s worth pursuing if you’re genuinely misclassified.

Be aware: not all providers are equally responsive to MCC change requests. Some treat it as a hassle, but others understand it’s part of proper merchant support.

Avoiding MCC Problems from the Start

The easiest fix is prevention. Payment issues Malaysia businesses face from MCC errors are avoidable with proper setup.

When choosing a payment provider, ask how they handle MCC assignment. Do they review your business model properly, or just tick boxes? Will they work with you to ensure accurate classification? Can they support changes if your business evolves?

For businesses just starting to accept online payments, the onboarding process matters. A payment button for website integration might seem simple, but behind it sits your entire merchant setup—including MCC assignment. Rushing through onboarding to “just get it working” often means inheriting classification problems that surface months later.

Providers like Razorpay Curlec take onboarding seriously, ensuring Malaysian merchants are properly categorised from day one. That attention to setup details prevents the headaches that come from wrong MCC code assignments down the line.

Get Your Payment Setup Right the First Time

MCC codes aren’t glamorous. They’re buried in the technical details most merchants never see. But getting yours wrong creates fees you shouldn’t pay, declines you can’t explain, and compliance risks you don’t need.

The fix starts with choosing a provider that cares about proper setup. If you’re adding a payment button for website checkout or setting up a full payment gateway, Razorpay Curlec’s onboarding process ensures your business is classified correctly from the start.

Accept payments without the hidden complications through Razorpay Curlec’s payment buttons for websites today. We’ll help you start with a setup that’s done right.

References:

1. Malaysia Interchange | Visa. (date n/a). Visa. Retrieved on 26th January 2025 from https://www.visa.com.my/run-your-business/small-business-tools/interchange.html

2. Merchant Interchange | Mastercard Australia. (date n/a). Mastercard. Retrieved on 26th January 2025 from https://www.mastercard.com.my/en-my/business/support/interchange.html

FAQ

Q1: What is an MCC code?

A: A Merchant Category Code (MCC) is a four-digit number assigned to businesses by card networks like Visa and Mastercard. It classifies your business type and affects processing fees, transaction approvals, and customer rewards eligibility.

Q2: How do I find my business’s MCC code?

A: Check your merchant agreement, contact your payment provider directly, or review your merchant portal if available. Some customers can also see MCC codes on their credit card statements, which can indicate how your business is classified.

Q3: Can I change my MCC codeif it’s wrong?

A: Yes, but it requires your payment provider to submit a change request to the card networks. You’ll need documentation proving your actual business activities. The process typically takes several weeks and approval isn’t guaranteed.

Q4: Why are my customers’ cards being declined?

A: Several reasons exist, but MCC mismatch is an often-overlooked cause. Some card issuers block transactions to certain business categories. If your MCC doesn’t accurately reflect your business, legitimate transactions may be declined unexpectedly.

Q5: Do online and offline businesses get different MCC codes?

A: Sometimes. A business with both physical and e-commerce operations might have different MCCs for each channel. This isn’t necessarily wrong, but inconsistencies can affect customer rewards and create operational confusion. Confirm with your provider how both channels are classified.