What is a Merchant Category Code?
A Merchant Category Code (MCC) is a four-digit code assigned to businesses by card networks (Visa, Mastercard) that classifies the type of goods or services they provide — used for transaction categorization, spending controls, and compliance reporting.
WHY IT MATTERS
Corporate cards use MCCs to restrict employee spending by category — allow restaurants and travel, block gambling and cash advances. This category-based control model is powerful for managing spending without micromanaging every transaction.
The crypto and agent world doesn't have a native MCC system, but the concept translates directly. Instead of merchant categories, you have protocol categories (DEX, lending, bridge), token types (stablecoins, governance tokens, memecoins), and contract types (verified, unverified, proxy).
For agent spending controls, category-based restrictions are often more practical than per-recipient allowlists. Rather than approving every DeFi protocol individually, you allow the agent to interact with 'verified lending protocols' or 'audited DEXes' as categories.
HOW POLICYLAYER USES THIS
PolicyLayer implements MCC-like category restrictions for agent spending. Define allowed protocol categories (DeFi lending, DEXes, bridges), token types, and interaction patterns — giving agents flexibility within category-level boundaries.