Sobirvs
TF Legend
Again, no. most of what you are saying is guess work from a consumer perception. You would know the truth if you have worked with PG/Bank(merchant section)/acquirer banks. There is no question of "perception". Fact is a fact.
For Visa, it's the Bank who decides it, it's not even PG who decides (unless the merchant account provider owns the PG for example paymentech - owned of chase or authorize.net owned by Visa themselves).
For mastercard, it's mc themselves who decides mcc not bank/pg/acquirer.
Speaking of business classifying themselves wrongly (fraud), whole liability falls on the business then. The amount a merchant is thinking of earning(profit) is simply not worth it when compared to the lawsuit bank/pg can file on them for doing fraud with them. Merchants just don't have any incentive of getting wrongly classified. Sure savesage found a way to make it profitable but think about it, what did sbiunipay profited for getting wrong classified? or canarasetu? or airtel? or phonepe? or amazon (remember the trick of zomato/amazon dc load)? Amazon earns from these tricks of wrong mcc? Amazon doesn't even care btw what people earn from their credit card rewards as they are not the one's who fund those, it's the bank who do, hence classification doesn't matter.
MCC are most for banks to classify merchant and merchant category so that they can encourage spending on specific catagory where they themselves earn good or even if they aren't earning, atleast they would want people to spend on a specific mcc / category where they can control the ecosystem or get people addicted to (for ex shopping) as banks themselves know to boost economy, it's not the money who does it, it's the goods and services.
Can banks give rewards/cashback for cc bills officially? ofc they can, but those are the bills bank know that customer will use/pay anyways, so it doesn't generate much card usage. Hence why bank gives rewards for those where shopping/merchandise is involved because those trxns weren't really needed most of the time. Going to amazon/flipkart just to buy crockery because we need them, but oh wait, it is showing a facy phone or a fridge, might aswell buy those aswell. This is exactly what banks want. Unnecessary spending. If banks don't encourage those trxns (by giving cashback), people would actually think why to even do the trxn then. I am not saying for 10 or 20rs reward, customer does a 5k trxn, but it does give some encouragement to the customer.
Now does wrong representation never happens? Well, atleast not just for "reward points/cashback". This is serious fraud that bank can sue for , and it's real money which bank themselves are funding so they won't let go. So when does wrong representation happens? Well it happens in high risk trxns/business. For example e-cig sales, or drugs or crypto business, Something which banks have prohibited, hence merchant would want to get classified for some category so they can do business otherwise thye can't process card trxns. No business cares for mcc code.
I have always though abt maximize though, as they actually advertise the sbi cashback and other trxn. My guess is they bribed someone at razorpay? Ofc It can be that razorpay made a mistake while classifying them. Probably when they made their website, they had products for "advertisement" business, but later when they got the merchant acc, they changed their items. Or them may be know someone at razorpay? Maximize people are very very smart. I have to give it to them as they aren't doing this just with razorpay but also with 2 more gateway providers.
I have worked in this industry, hence I have somewhat knowledge about this.
