Within the card program, your organization likely blocks the merchant category code (MCC) for casinos, but gambling might still be happening. Maybe you think your program is also protected from Venmo transactions, but the reality might reveal otherwise. If you have been in the Commercial Card industry for any length of time, you know that a vendor’s MCC might be overly vague or, worse yet, inaccurate. But do you know where your program might get tripped up? After participating in an April podcast by AP Now on consumer-type purchases on company credit cards, including Venmo, I was contacted by Paul Newton of Barque Labs, which offers a card analytics engine. He shared some MCC insights that might surprise you, like gambling and Venmo, but there are more you should be aware of, as shared within this post.

MCC Insights

If you think your card program is protected from cardholder gambling, Paul points out that FanDuel and DraftKings (online fantasy sports and gambling sites) have been found under MCC 5816 Digital Goods: Games.

Venmo is another matter. Paul has seen Venmo transactions under MCC 7399 Business Services Other, which might also be the MCC for many allowed vendors within an organization’s card program.

He also observes that something like sports tickets are commonly expected under MCC 7941: Commercial/Pro Sports, but often appear under MCC 7922: Theatrical Producers, mainly because they are booked through Ticketmaster. 

In addition, in Paul’s experience, the following MCCs are worth looking at more closely because the transactions might be for something other than allowed business expenses.

• MCC 5411: Grocery Stores

• MCC 5542: Automated Fuel Dispensers

  • If mileage is reimbursed, yet an employee is filling the gas tank with a company-paid card, the employee might be profiting.

• MCC 5941: Sporting Goods Stores; Paul has seen personal purchases for golf gear

• MCC 6513: Real Estate Agents/Rentals, which could indicate vacation transactions and longer term rentals by employees

• MCC 7230: Beauty and Barber Shops, frequently including nail salons

Analytics Opportunity: Check Your Data

For three end-user organizations, Paul Newton is offering complimentary access to his company’s analytics tool for a limited time. You would need to supply your downloaded card transactions (.csv file) and he would make them available through the app for a couple months. In return, participating end-users would need to provide feedback about their experience with the app. Please contact Paul directly if you are interested: pnewton@barquelabs.com.

Final Thoughts

MCC blocking is an inexact science of sorts. I do not endorse going overboard with this card control, as doing so usually leads to the decline of legitimate business transactions—and it can consume too much of a program manager’s time. Instead, focus on blocking “high risk” MCCs and, for cardholders who do not take business trips, block travel-related MCCs.

Every organization should be aware of the MCCs that might indicate a policy violation or internal fraud, but do not jump to conclusions. Do your research first. Further, one of the best things your organization can do is utilize a robust auditing solution.

Definition

merchant category codes (MCCs)
Four-digit codes, used in the card industry, to signify each merchant’s primary type of business; a merchant or its acquirer selects/assigns an MCC when the merchant is set up to accept card payments.

A listing of Visa/Mastercard MCCs can be obtained through a simple Google search.

Related Event and Content

• July 13 webinar: Consumer-Type Purchases on Company Credit Cards: Problems & A Best Practice Policy; hosted by AP Now, featuring Recharged Education’s Lynn Larson as the speaker. For details and registration, visit AP Now.

• April blog post: Amazon, PayPal, eBay—Should Your P-Card Policy Allow?

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About Paul Newton

Paul Newton is the founder of Virginia-based Barque Labs, who deploy domain-specific bots to generate deep insights in seconds. Barque’s Card Analytics Engine can be deployed in a few days and runs ~250 tests against every single card transaction. Previously, Paul was Head of Analytics at a CPA firm where he pioneered analytics solutions for purchase cards, expense reports, freight, shipping delays and supplier management. Paul also founded Zimtoti Analytics where he led a $100M business turnaround, and was the EVP of Operations at Spring Global, the CFO/COO at Themis Analytics and VP of Services at webMethods.

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About the Author

Blog post author Lynn Larson, CPCP, launched Recharged Education in 2014. With 20 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…