Every merchant is assigned a merchant category code (MCC) — a four-digit number used by card networks to classify the primary business activity. MCCs determine how transactions are processed, how fees are structured, and how risk is assessed.
Let’s take a closer look at MCC 5816.
What is MCC 5816?
MCC 5816 is designated for merchants that sell digital games and related in-game content delivered electronically. The following are some examples.
- Mobile and console games: Titles available for download or streaming on smartphones, tablets, and gaming consoles.
- PC and browser-based games: Games accessible via download or online platforms.
- In-game purchases: Virtual goods such as skins, power-ups, or additional levels.
- Skill-based gaming platforms: Services offering games where outcomes are determined by player skill rather than chance.
Merchants in this category may operate through dedicated gaming platforms, app stores, or independent websites. It’s important to note that businesses offering a broader range of digital goods may fall under different MCCs like 5818 (Digital Goods – Multi-Category).
Is MCC 5816 considered high risk?
Although technically not a high-risk MCC, 5816 is generally viewed as high risk due to:
- Card-Not-Present Transactions: Purchases are processed without a physical card, making them more vulnerable to fraud.
- Instant Delivery: Immediate access to content leaves little time to detect fraudulent activity, which can lead to higher dispute rates.
- Subscription Models: Offering recurring billing for digital games or content can increase disputes if cancellation and renewal policies are not clearly presented and easy to follow.
- Regulatory Exposure: Platforms providing skill-based games, such as daily fantasy sports, often face varying and complex legal requirements across jurisdictions.
Processors frequently apply tighter controls to this category, which may include:
- Chargeback Tracking: Ongoing monitoring of dispute activity to avoid excessive ratios.
- Fraud Prevention Tools: Requirements to implement safeguards like 3D Secure or strong customer authentication.
- Reserve Policies: Holding back a percentage of sales to offset potential chargeback liability.
Does MCC 5816 require a license?
Merchants in this category must follow a combination of regulatory, industry, and processor-specific obligations, which may include:
- Consumer Transparency: Clear, accurate descriptions of content, pricing, subscription terms, and refund options.
- Data Security: Full compliance with PCI DSS to protect payment information.
- Age Restrictions: Implementing verification processes to block underage users from accessing restricted content.
- Legal Alignment: Confirming that skill-based games comply with local and national laws, especially in regions where the definition of “gambling” may vary.
Does MCC 5816 have special fees or pricing?
While not all acquirers apply dedicated MCC surcharges, merchants often see adjustments to standard pricing because of the category’s elevated risk profile. Common factors could include:
- Higher Interchange Rates: Reflecting the likelihood of fraud and disputes with digital goods.
- Account Reserves: Holding funds in escrow for a set period to safeguard against chargebacks.
- Microtransaction Costs: Higher rates on small-dollar purchases if they make up a large share of sales.
Pricing structures can shift based on:
- Business Model: Subscription-heavy operations may be priced differently from one-time purchase models.
- Dispute History: A pattern of high chargebacks can trigger more restrictive terms.
- Processor Policies: Each acquirer has its own thresholds and appetite for risk.
Can I have multiple MCCs if I offer multiple services?
Yes — if each service operates as a fully independent business unit with its own merchant account.
For example, a company selling downloadable games under MCC 5816 and distributing productivity software under MCC 5817 may qualify for separate MCCs.
If both services are run through a single merchant account, the MCC will be assigned based on the dominant revenue source.
What are some similar MCCs?
Merchants whose offerings overlap with other categories might also consider:
Ready to Optimize Payment Processing for Your Digital Gaming Business?
AltoPay works with digital gaming merchants to provide merchant accounts that match their operational needs and risk profile. Whether you’re selling premium titles, downloadable expansions, or in-game purchases, we can help you:
- Secure a merchant account built for your category.
- Get competitive rates that reflect your business model and transaction patterns.
- Stay compliant with evolving regulations and processor requirements.
FREQUENTLY ASKED QUESTIONS
What else do I need to know about MCCs?
Are MCCs the same across all card networks and acquirers?
Visa, Mastercard, and other card networks have their own list of MCCs, but they are mostly the same. MCC variations happen when acquirers or processors assign codes. You can end up with different MCCs depending on how each acquirer or processor interprets your activity.
Who decides my MCC?
The acquiring bank or payment processor sets your MCC during merchant account approval. They review your primary products or services and choose the closest match from network guidelines. You can’t pick your own code, but reassignment is possible with justification.
How do I know what my MCC is?
You can usually find your MCC on your VAR sheet (sometimes called a registration form, onboarding sheet, or MID credential form), onboarding paperwork, or online processing portal. If you still can’t find it, your solution provider’s support team should be able to confirm the code.
Does my MCC affect my interchange rate?
Yes. Card networks assign different fee categories to each MCC. Those tied to higher-risk industries often carry higher interchange pricing.
Can my MCC affect my ability to process payments?
Yes. Some processors restrict or prohibit certain MCCs. Others may accept the category but require reserves, volume limits, or additional underwriting.
How often can my MCC change?
Your MCC will only change if your main business model changes. Requests for a new MCC require documentation proving the shift in operations.
What happens if I’m misclassified with the wrong MCC?
Incorrect classification can increase costs and slow down the application process, so it’s important to make sure your business has the most accurate code. If necessary, provide your processor with proof of your actual activity to request a correction.
