DEFINITION
MCC Database / 5817: Digital Goods – Software Applications (Excludes Games)
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 5817.
What is MCC 5817?
MCC 5817 is designated for merchants primarily engaged in selling digital software applications delivered electronically — excluding games. This category encompasses a wide range of software products. The following are some examples.
- Productivity tools: Word processors, spreadsheets, and presentation software
- Creative applications: Graphic design, video editing, and animation programs
- Utility software: Antivirus programs, system optimizers, and file management tools
- AI assistants: General AI assistants with no gaming focus
- Educational software: Language learning, tutoring platforms, and e-learning modules
- Business solutions: Accounting software, customer relationship management (CRM) systems, and project management tools
These applications are typically distributed through online platforms, app stores, or direct downloads from the developer’s website. It’s important to note that merchants offering a broader range of digital goods may fall under different MCCs, such as 5818 for multi-category digital goods.
Is MCC 5817 considered high risk?
MCC 5817 is technically not a high-risk code requiring high-risk registration with the card schemes, but it is generally viewed as moderate risk. It’s not automatically high risk, but certain operating factors can increase how processors evaluate it:
- Online-Only Transactions: Most purchases happen without a physical card present, which can increase vulnerability to payment fraud.
- Ongoing Billing Models: Subscriptions or auto-renewing licenses for applications may lead to disputes if users are unclear on how to cancel.
- Instant Product Access: Providing software immediately after payment can shorten fraud detection windows, contributing to a higher dispute rate.
Payment providers may apply additional controls for this category, including:
- Dispute Ratio Reviews: Keeping a close watch on chargeback percentages.
- Advanced Fraud Checks: Adding authentication layers like 3D Secure.
- Funds Held in Reserve: Retaining a portion of sales temporarily to cover possible losses.
Does MCC 5817 require a license?
Businesses in this category should account for a range of compliance considerations:
- Truthful Marketing: Clearly communicate product capabilities, pricing, and refund terms.
- Payment Security: Maintain PCI DSS compliance to protect payment credentials.
- Legal Software Use: Ensure all distributed applications meet licensing terms and intellectual property protections.
- Content Rules: Follow applicable regional or international regulations for restricted or export-controlled software.
Does MCC 5817 have special fees or pricing?
There’s no standard surcharge attached to this MCC, but pricing often reflects perceived risk:
- Increased Interchange Costs: Common for sectors with elevated fraud exposure.
- Reserve Policies: Holding back part of daily settlements for a set period.
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, provided each service operates independently and has its own merchant account.
For example, a business selling downloadable productivity software (MCC 5817) and offering paid professional training (MCC 8299) could be assigned two codes.
If both are handled under one merchant account, the MCC will reflect the primary source of revenue.
What are some similar MCCs?
The following MCCS are similar to 5817.
Ready to Optimize Payment Processing for Your Software Application Business?
AltoPay delivers merchant solutions tailored to the realities of selling software online. Whether you focus on productivity tools, creative applications, or enterprise platforms, we offer:
- Accounts designed for your sales model
- Transparent, competitive rates
- Risk management and compliance guidance
FREQUENTLY ASKED QUESTIONS
What else do I need to know about MCCs?
Are MCCs the same across all card networks and acquirers?
Usually. But even though Visa, Mastercard, and other card networks reference lists that are roughly the same, processors and acquirers may apply codes differently based on their interpretations of your business.
Who decides my MCC?
Your 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 provided MCC lists. You can’t pick your own code, but reassignment is possible with supporting documents.
How do I know what my MCC is?
You can usually locate your MCC on your VAR sheet (might be called a registration form, onboarding sheet, or MID credential form), on your onboarding paperwork, or in your online processing portal. If you still can’t find it, your solution provider’s support team can confirm your 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 transaction costs — including interchange fees.
Can my MCC affect my ability to process payments?
Possibly. Some processors restrict or prohibit certain MCCs. Others may accept the category but require reserves, transaction caps, or additional underwriting.
How often can my MCC change?
Your MCC will only change if your main business model changes. You can request a different MCC if your current assignment isn’t a good fit. You’ll probably need to provide documentation that proves the shift in operations.
What happens if I’m misclassified with the wrong MCC?
Incorrect classification can increase costs, so it’s important to make sure you have the correct code. Provide your processor or acquirer with proof of your actual business activity to obtain a correction.
