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The MCC Code check generates an appropriate Merchant Category Code for a business based on its activities, products, and services. This check helps categorize businesses for payment processing, risk assessment, and compliance purposes.

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Overview

The check examines:
  • Business description and activities
  • Products and services offered
  • Industry classification
  • Website content and offerings
  • Business model and operations

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What is an MCC Code?

Merchant Category Codes (MCCs) are four-digit numbers used by credit card networks to classify businesses by the type of goods or services they provide. MCCs are used for:
  • Payment processing and interchange fees
  • Risk assessment and underwriting
  • Tax reporting requirements
  • Rewards program categorization
  • Compliance and monitoring

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Running the Check

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API Endpoint

POST https://api.parcha.ai/api/v1/startKYBAgentJob

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Request Parameters

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agent_key
string
required
Use "public-bdd" for business due diligence checks.
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check_id
string
required
Use "kyb.mcc_code_check_v3" for MCC code generation.
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payload
object
required
The business information for verification.

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Example Request

curl -X POST 'https://api.parcha.ai/api/v1/startKYBAgentJob' \
-H 'Authorization: Bearer YOUR_API_KEY' \
-H 'Content-Type: application/json' \
-d '{
  "agent_key": "public-bdd",
  "check_id": "kyb.mcc_code_check_v3",
  "payload": {
    "id": "mcc-check-001",
    "self_attested_data": {
      "business_name": "CloudTech Solutions",
      "description": "We provide cloud-based software solutions for small businesses, including accounting software, CRM tools, and project management platforms delivered as SaaS",
      "website": "https://cloudtech.example",
      "industry": "Software as a Service"
    }
  }
}'

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Initial Response

{
  "id": "job-abc123",
  "status": "PENDING",
  "created_at": "2024-02-15T10:30:00Z",
  "updated_at": "2024-02-15T10:30:00Z",
  "agent_id": "public-bdd",
  "input_payload": {
    // Original request payload
  }
}

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Retrieving Check Results

Once the job is complete, retrieve the results using the job ID with the getJobByID endpoint. Make sure to include the include_check_results=true parameter to get the full check results. 
GET https://api.parcha.ai/api/v1/getJobByID?job_id=job-abc123&include_check_results=true

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Check Process

The MCC code check follows these steps:
  1. Business Analysis
    • Analyzes business description and activities
    • Reviews website content (if provided)
    • Identifies primary products and services
    • Evaluates business model
  2. MCC Code Selection
    • Matches business activities to MCC code database
    • Selects most appropriate 4-digit MCC code
    • Provides MCC code description
    • Evaluates confidence level
  3. Verification (if self-attested MCC provided)
    • Compares generated MCC with self-attested MCC
    • Identifies mismatches or discrepancies
    • Provides rationale for differences
  4. Risk Assessment
    • Flags high-risk MCC codes
    • Identifies prohibited categories
    • Evaluates compliance implications

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Check Results

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Response Structure

{
  type: "MCCCodeCheckResult";
  passed: boolean;
  generated_mcc: {
    code: string;
    description: string;
    category: string;
    confidence_score: number;
  };
  self_attested_mcc?: {
    code: string;
    description: string;
  };
  match_status?: "exact_match" | "category_match" | "mismatch";
  alternative_mccs?: Array<{
    code: string;
    description: string;
    relevance_score: number;
  }>;
  risk_assessment?: {
    is_high_risk: boolean;
    is_prohibited: boolean;
    risk_factors?: Array<string>;
  };
}

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Example Results

{
  "type": "MCCCodeCheckResult",
  "passed": true,
  "generated_mcc": {
    "code": "7372",
    "description": "Computer Programming, Data Processing, and Integrated Systems Design Services",
    "category": "Business Services",
    "confidence_score": 92
  },
  "alternative_mccs": [
    {
      "code": "5734",
      "description": "Computer Software Stores",
      "relevance_score": 78
    },
    {
      "code": "7379",
      "description": "Computer Maintenance, Repair, and Services",
      "relevance_score": 65
    }
  ],
  "risk_assessment": {
    "is_high_risk": false,
    "is_prohibited": false
  }
}

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High-Risk MCC Codes

Certain MCC codes are flagged as high-risk, including:
  • 4829 - Money Transfer
  • 5967 - Direct Marketing - Inbound Teleservices
  • 7372 - Computer Programming (when misused)
  • 7995 - Betting/Gambling
  • 6010-6012 - Financial Institutions Cash Disbursements
  • 6051 - Non-Financial Institutions Currency Services
  • 5262 - Marketplaces
  • 8398 - Charitable Organizations

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Risk Factors

The check may flag concerns if:
  • Generated MCC is in prohibited or high-risk category
  • Significant mismatch between self-attested and generated MCC
  • Business activities span multiple unrelated MCC codes
  • Description suggests regulated activities (money transfer, gambling, etc.)
  • MCC code history shows frequent changes
  • Business model is unclear or ambiguous

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Best Practices

  1. Provide Detailed Description: Include specific products, services, and business model
  2. Be Accurate: Misrepresenting business activities can lead to account termination
  3. Include Website: Website analysis improves MCC accuracy
  4. Update Regularly: Re-run check if business model changes
  5. Understand Restrictions: Some MCC codes require additional licensing or compliance

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Configuration Options

  • exclude_99_codes: Exclude special-purpose 99XX MCC codes
  • high_risk_mcc_codes: Customize list of high-risk MCC codes to monitor