MCC 1520: General contractors - residential buildings

Learn about MCC 1520, its impact, and how to verify it. Download JIM (iOS/Android) to take phone payments in seconds for a 1.99% fee.

WRITTEN BY

Mar 25, 2026

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2 min read time

MCC 1520 is a code used by the International Organization for Standardization (ISO) to classify general contractors for residential buildings. This category applies to businesses that build new single-family and multi-family homes from the ground up. The code also covers transactions for major alterations, additions, and remodeling projects on existing residential properties, distinguishing these contractors from those who work on commercial or industrial structures.

Which businesses fall under MCC 1520?

MCC 1520 applies to a broad range of residential construction establishments:

Home Builders: These companies construct new single-family houses and planned communities. Large national firms like D.R. Horton and Lennar Corporation are prominent examples in this category.
Residential Remodeling Contractors: These firms specialize in major alterations and renovations of existing homes, such as complete kitchen or bathroom overhauls. They manage projects that update and reconfigure interior spaces.
Custom Home Builders: They work directly with clients to create unique, one-of-a-kind homes based on specific plans. These builders manage the entire bespoke construction process from start to finish.
Multi-family Housing Contractors: These businesses build structures designed for multiple families, like apartment complexes, condominiums, and townhomes. Greystar is a well-known company involved in developing such properties.
Residential Addition Contractors: These specialists focus on expanding existing homes by building new rooms, sunrooms, or second-story additions. Their work directly increases a property's square footage and living area.
Design-Build Firms: These integrated companies provide both architectural design and construction services under one contract. This model offers homeowners a single point of responsibility for the entire project.
Fix-and-Flip Companies: These businesses purchase, extensively renovate, and then sell residential properties for a profit. They act as the general contractor for their own investment renovation projects.

Business implications of MCC 1520

Payment networks including Visa, Mastercard, American Express, and Discover use MCC 1520 to categorize transactions, which affects several aspects of business operations. These networks evaluate the risk associated with different industries, and MCCs are a primary tool for this assessment. For general contractors, the high value and long duration of projects can lead to a higher perceived risk, which may influence the interchange rates applied to their transactions.

Beyond risk assessment and transaction fees, this classification code also plays a part in internal financial management and customer interactions. The code helps streamline several operational processes for both the business and its clients.

Expense tracking

Companies use MCC 1520 to automatically categorize business-related purchases on their credit card statements. This simplifies expense management by sorting payments for materials or subcontractor services, which helps in accurately tracking project costs and identifying potentially tax-deductible expenditures for accounting purposes.

Financial analysis

Businesses can analyze spending patterns associated with MCC 1520 to gain better financial oversight. This data allows them to track project-specific costs, forecast future expenses with greater accuracy, and manage budgets more effectively by spotting trends in their construction-related expenditures.

Compliance and auditing

The consistent application of MCC 1520 creates a clear and reliable audit trail for financial verification. This simplifies the process of confirming that expenses are legitimate and adhere to company spending policies.

Rewards and customer behavior

Credit card issuers often structure rewards programs around MCCs, offering bonus points for spending in certain categories like home improvement. This can influence a client’s payment choice, as they may prefer a card that gives them rewards for their large renovation project.

How to verify your business's MCC

General contractor owners should confirm their MCC classification to ensure proper transaction processing and avoid customer confusion regarding rewards eligibility. If you find out that your business is incorrectly classified—for example, a residential contractor coded as a commercial construction firm—contact your payment processor immediately to request reclassification.

Here's how to verify your MCC classification is set up correctly:

Contact Your Payment Processor: Your merchant services provider assigned the MCC during account setup. Contact their customer service department or review your merchant agreement documents to verify the classification. This is the most direct way to get the information.
Review Processing Statements: Your monthly merchant statements usually display the assigned MCC. Look for a four-digit number in the account information or business profile section of the document to find your code and confirm it is correct.
Check with Your Acquirer: The acquiring bank or financial institution that processes your payments maintains the MCC code in their system. You can reach out to their merchant support team, and they can confirm your current business classification on file.
Test Transaction Method: Some merchants run a small test transaction and check how it appears on a personal credit card statement. This method is less reliable than direct confirmation from your payment processor, as statement descriptions can vary.

How to choose a reliable payment service provider

MCC 1520 directly influences interchange rates, making your choice of payment provider a major business decision. Processors vary in how they handle high-value construction transactions, with differences in pricing, settlement speed, and support that accumulate over time. Evaluate providers based on the following factors to find the best fit.

Transparent pricing: Flat-rate pricing offers predictability over complex interchange-plus or tiered models that can obscure the true cost of a transaction. The JIM tap-to-pay app for iPhone and Android charges 1.99% per transaction with no setup costs, monthly fees, or premium card surcharges.
Payment method support: Your processor should accept major cards like Visa, Mastercard, and Discover, plus digital wallets such as Apple Pay and Google Pay. This flexibility meets modern customer expectations for convenient, contactless payments.
Fast fund access: Quick access to funds is necessary for managing cash flow in construction. Instant or next-day deposits allow you to cover immediate operational costs like supplier payments, restocking inventory, or making payroll without delay.
Security: Top providers protect sensitive data with features like tokenization and end-to-end encryption. Tokenization replaces card numbers with a unique code for each transaction, so actual card details are never stored on your device.
Reporting: Look for a provider that offers clear financial analytics. The JIM AI assistant provides sales reports and transaction history through a chat interface, which simplifies bookkeeping and business analysis.

Streamline payments with JIM

JIM offers general contractor owners a straightforward payment processing solution. You can turn your iPhone or Android phone into a tap-to-pay terminal with the JIM tap-to-pay app, which uses NFC technology so you need no extra hardware. The pricing is a flat 1.99% per transaction. You face no setup costs, monthly fees, or variable rates for premium cards.

For remote collections, you can use payment link payments (for project deposits or material prepayments) at 4.99% + $0.30 per sale. Your funds become available instantly on a JIM Visa Prepaid Card. You can add this card to Apple Pay or Google Pay for immediate use on business expenses. This gives you direct access to your revenue without typical bank delays.

Frequently Asked Questions

Question

What is Merchant Category Code 1520?

Merchant Category Code 1520 is a four-digit classification number assigned to general contractors for residential buildings by payment networks and the ISO. The code identifies businesses that build, remodel, or make additions to single-family and multi-family homes. Payment processors use this code to categorize transactions for interchange fees, reporting, and customer rewards programs.

Is Merchant Category Code 1520 high-risk?

Payment processors classify MCC 1520 as a high-risk category. This designation is due to the large transaction values and long project durations common in residential construction, which increase the likelihood of chargebacks. As a result, businesses with this code usually encounter higher processing fees and stricter underwriting requirements from payment providers.

Can a business have multiple MCC codes?

A business is generally assigned one MCC per merchant account, which corresponds to its main activity. If a company has distinct revenue streams, it can maintain multiple merchant accounts with different codes. For example, a large home improvement retailer, primarily coded under MCC 5211 for hardware sales, might also run a separate division for full-scale home renovations. That specific division would be classified under MCC 1520 to properly categorize its general contracting work on residential properties.

What happens if my MCC code is wrong?

An incorrect MCC can lead to improper interchange rates. This either inflates your transaction costs or creates non-compliance with network rules if you get preferential fees by mistake. This also impacts your clients, who may not receive the home improvement rewards they expect, which can reduce satisfaction and affect their decision to work with you again.

Can merchants choose their MCC code?

Merchants do not have the ability to choose their own MCC code. Instead, payment processors assign the classification based on a business's primary activities and revenue sources, in accordance with ISO standards and payment network rules. If a business owner finds that their assigned code does not accurately represent their operations, they can formally request a reclassification from their processor. This process helps align the code with the company's actual business model.

How does MCC 1520 affect my payment processing costs?

Your MCC code directly shapes the interchange rates you pay on every transaction. Since payment networks view MCC 1520 as a high-risk category, contractors in this field often face higher base processing fees compared to lower-risk industries like retail or food service. The exact financial impact, however, depends on your payment processor’s pricing structure.

An interchange-plus model passes these variable rates directly to you, which means costs can fluctuate. In contrast, flat-rate processors like JIM, available for both iOS and Android, absorb this variability and charge a consistent fee regardless of the card type used.