Certain MCC codes are flagged as "high-risk" by payment processors and credit card networks. These codes are associated with industries that have higher fraud rates, chargeback rates, or regulatory concerns. Understanding these codes is essential for developers, merchants, and anyone interested in payment processing.
What Makes an MCC "High-Risk"?
Card networks and payment processors designate certain MCCs as high-risk based on:
- Higher chargeback rates: Industries where customers frequently dispute charges
- Fraud vulnerability: Categories prone to fraudulent transactions
- Regulatory concerns: Industries with legal restrictions in various jurisdictions
- Reputational risk: Categories that could harm the payment network's image
Common High-Risk MCC Codes
Gambling and Betting (MCCs 7800, 7801, 7802, 7995)
Why high-risk: Gambling has strict regulations that vary by jurisdiction, high chargeback rates due to buyer's remorse, and potential for money laundering.
Cryptocurrency and Financial Services (MCCs 6051, 6012, 6211)
Why high-risk: Cryptocurrency transactions are volatile, regulatory landscape is uncertain, and there's potential for fraud and money laundering.
Adult Content (MCC 5967)
Why high-risk: Age verification challenges, reputational concerns for card networks, and high chargeback rates.
Other High-Risk Categories
Implications for Merchants
If your business falls under a high-risk MCC, you can expect:
- Higher processing fees: Payment processors charge more for high-risk transactions
- Reserve requirements: May need to maintain a reserve fund for chargebacks
- Enhanced due diligence: More stringent onboarding and monitoring
- Limited processor options: Not all payment processors accept high-risk merchants
- Volume caps: May have monthly processing limits
Implications for Developers
If you're building payment or fintech applications, high-risk MCCs require special handling:
- Transaction blocking: Some cards automatically decline high-risk MCCs
- Fraud detection: Enhanced monitoring for these transaction types
- Compliance requirements: Additional data elements may be required
- Risk scoring: These MCCs may affect your application's risk calculations
Visa's High Integrity Risk Classification
Visa specifically designates certain MCCs as "high integrity risk" for card-absent transactions:
- 5122 (Drugs, Drug Proprietaries)
- 5912 (Drug Stores - card-absent)
- 5966 (Outbound Telemarketing)
- 5967 (Adult Content)
- 5993 (Cigar Stores)
- 7273 (Dating Services)
- 7995 (Betting/Gambling)
These merchants face enhanced registration requirements and stricter monitoring by acquirers.
Credit Card Restrictions
Many credit cards have restrictions related to high-risk MCCs:
- Cash advance treatment: Crypto and gambling often treated as cash advances (higher fees, no rewards)
- Transaction blocking: Some cards block certain MCCs entirely
- No rewards: High-risk categories often excluded from bonus rewards
- Credit limit impact: Heavy use of gambling MCCs may affect credit reviews