3357 Hertz

Introduction

• What it is: This MCC covers businesses primarily engaged in renting automobiles and trucks.
• Risk level: Medium — Vehicle depreciation and theft contribute to a higher exposure.
• Acceptance difficulty: Medium — While acceptable, rental agencies face some scrutiny due to the nature of transactions.
• Typical business models: car rental agencies; truck rental services; van rental companies; peer-to-peer vehicle sharing.
• For merchants: Expect moderate MDR rates; potential holds required on credit cards; streamlined verification processes for rentals.
• What PSPs expect: Verification of business operations; proof of vehicle ownership or leasing agreements; robust user identity checks for financial transactions.

Payment Insights & Benchmarks

Merchants in this MCC should anticipate unique challenges when it comes to payment processing. The nature of the rental industry often leads to increased friction, necessitating a keen understanding of payment behavior and associated costs.

Payment methods

Cards: primary method of payment, though often subject to higher scrutiny and lower approval rates for rentals.

• E-wallets: useful for quick transactions, but may not be universally accepted across all rental platforms.
• Corporate cards: prevalent for business rentals, accompanied by specific chargeback considerations.
• Payment plans: installment options may attract fees and complexity in reconciliation.

Authentication & security

Strong Customer Authentication (SCA) is typically required, impacting customer experience.

• 3DS can help mitigate fraud, yet may lead to transaction abandonment if not optimized.
• Fraud prevention strategies need to consider rental duration, location, and customer verification.

Benchmarks (indicative, not guaranteed)

MDR: often higher than standard retail due to associated risks and processing fees.

• Rolling reserves: frequently implemented to mitigate potential chargebacks and fraud.
• Settlement times: may exceed standard e-commerce, often 7-14 days.
• Chargeback ratios: generally above average, driven by customer disputes over rentals.
• Approval rates: can vary significantly, particularly for first-time renters or high-risk geos.

Key metrics to monitor

Transaction declines, particularly focusing on reasons and trends over time.

• Chargeback rates and categories to differentiate between fraud and legitimate disputes.
• Customer rental patterns to identify potential flags for high-risk transactions.
• Overall customer satisfaction related to payment processing smoothness.

Risk & Compliance

Merchants under this MCC are closely scrutinized due to elevated financial and reputational risks. PSPs and acquirers typically apply stricter controls, expecting merchants to proactively address fraud, chargebacks, and AML/KYC compliance.

Chargebacks & fraud

Common issues include friendly fraud ("I didn’t authorize this transaction") and bonus abuse, particularly with loyalty programs.

• Fraudulent activities such as using stolen identities for rentals or multiple bookings from the same customer in a short period often occur.
• Mitigation tools include velocity checks to limit the number of transactions in a specific timeframe and device fingerprinting to identify unusual device usage.

AML/KYC expectations

Strong customer identity verification (IDV) measures are expected, including thorough checks against sanctions lists and politically exposed persons (PEP).

• Source-of-funds verification is crucial, particularly for high-value rentals or unusual booking patterns.
• Manual review triggers may include frequent high-value rentals, single transactions from new or unverified accounts, or unusual payment behaviors.

Operational red flags

Lack of transparency regarding ownership of the rental entity or hidden operators can raise concerns.

• Unclear terms and conditions for rental agreements or customer support processes may alarm PSPs.
• Traffic originating from high-risk countries or through unverified partners can be viewed as suspicious.
• Failure to implement sufficient customer verification procedures may lead to heightened scrutiny.

Onboarding Checklist

Merchants under this MCC should prepare a complete onboarding package before approaching PSPs or acquirers. A well-structured submission improves approval chances and shortens review times.

Legal & corporate documents

company registration and incorporation documents

• disclosure of beneficial owners (UBO) and corporate structure
• valid licenses for the relevant business activities
• policies: Terms of Service, Privacy, AML/KYC, Refund Policy

Financials & risk management

recent financial statements and cashflow forecasts

• liquidity or reserve model for payouts
• description of antifraud setup and monitoring tools

Product & marketing

demo access or screenshots of the live platform

• marketing plan and traffic source overview (affiliates, SEO, PPC)
• geographic targeting information
• KYC flow details, including IDV providers and thresholds

Technical integration & security

payment architecture overview with supported methods/providers

• description of SCA/3DS flows, retry logic, and tokenization
• PCI DSS compliance status and data storage policy

Operations

customer support coverage (languages, 24/7 if available)

• SLA for dispute handling and chargeback response
• deposit and rental terms; self-exclusion mechanisms
• internal process for chargeback investigation and documentation

Regulation & Licensing

Licensing and certification are essential for merchants within this MCC, as payment service providers (PSPs) and acquirers will require validation of compliance before facilitating transactions. Recognition of licenses varies significantly based on the merchant's jurisdiction and their target markets.

Operator licenses

Department of Transportation (DoT) — essential for transportation service providers in the U.S., ensuring they comply with safety and regulatory standards.

• Local taxi or transportation authority permits — required in many jurisdictions for operating locally, reflecting regional regulations.
• International Air Transport Association (IATA) accreditation — important for companies involved in travel and vehicle rental on an international scale.
• Vehicle licensing from city or county governments — obligatory for fleet operators, ensuring vehicles meet health and safety regulations.
• Insurance certifications — necessary to confirm that the company meets liability and other insurance requirements.

Geo-restrictions

Some countries impose restrictions on foreign vehicle rental services, hindering cross-border operations.

• In the U.S., state-specific regulations can affect the legality of rental operations and customer safety standards.
• EU regulations may impose different requirements for vehicle emissions and environmental standards.

Certifications & audits

PCI DSS compliance for handling payment card data securely.

• Customer service and safety audits to maintain operational excellence and passenger safety.
• Environmental audits to ensure compliance with sustainability practices and local regulations.
• Regular vehicle inspections and maintenance reports to adhere to safety standards.

Official Definitions & Network Comparisons

This section shows how major card networks define this MCC and highlights practical differences that affect merchant onboarding.

Explanation:

While the core definitions align around car rental services, differences in terms like "leisure" and "business" might affect categorization for specific merchants. Various networks may impose distinct requirements for licensing and compliance, impacting the onboarding process. Common issues leading to denials can include failure to meet local regulations, insufficient documentation of rental agreements, or fraud detection flags related to transactions.

Alternative MCC Codes

Merchants often confuse this MCC with other categories. The table below shows which codes are related, why they are confused, and what risks misclassification brings.

Rule of thumb for merchants:

Ensure that you classify your rentals specifically based on the type of vehicles or services offered. Misclassifying rentals can lead to compliance issues and potential audits, resulting in disrupted business operations. Always choose the MCC that closely matches the primary service characteristic.

Best Practices for Merchants

Merchants under the MCC 3357 face unique challenges in the car rental industry that require proactive management of payments, risks, and operations. Adhering to the following best practices will help mitigate disputes and foster successful relationships with payment service providers.

Classification & transparency

always use the correct MCC; incorrect classification can lead to account issues or closure

• clearly disclose rental terms, geographic restrictions, and cancellation policies on the website
• maintain transparent business operations and provide easily accessible contact information

Fraud & chargeback reduction

implement 3DS or step-up authentication for high-risk transactions, such as those involving large amounts or foreign rentals

• use clear billing descriptors and confirmation messages to increase customer trust
• log all rental transactions and customer interactions to support evidence in chargeback disputes

Payment acceptance optimization

accept multiple payment methods (credit/debit cards, wallets, etc.) to cater to diverse customer preferences

• analyze transaction patterns to route payments effectively, optimizing acceptance rates by geographic region
• consider using separate MIDs for different car categories or locations to manage risk more effectively

Operational discipline

monitor key performance indicators, including authorization rates, chargeback ratios, and average transaction values

• conduct regular compliance audits and maintain updated operational policies regarding fraud and customer service
• establish a dedicated team or individual to handle disputes and ensure timely response to customer inquiries

Payouts & liquidity

prepare liquidity buffers to address rolling reserves and manage payment schedules

• automate AML checks for withdrawals, especially for larger transactions or frequent rental arrangements
• keep track of payout patterns and unusual withdrawal requests to mitigate potential risks

Business Scope & Examples

This MCC covers businesses specializing in the rental and leasing of cars and trucks to consumers and businesses. Merchants classified under this category typically operate rental agencies where customers can engage in short-term or long-term vehicle rentals, providing essential transportation services.

Models

traditional car rental services (e.g., airport and local agencies)

• truck rental companies (for commercial and personal use)
• luxury vehicle rental services
• peer-to-peer car rental platforms
• long-term leasing companies for individuals and businesses

Borderline cases

Ride-sharing services — platforms providing chauffeur services (e.g., Uber, Lyft); typically classified under a different MCC.

• Car dealerships — businesses selling vehicles rather than renting them; usually fall under retail automotive MCCs.
• Car sharing services — programs allowing users to rent vehicles for short periods; may fit if structured similarly to traditional rentals.

Signals for correct classification

customer pays for the use of a vehicle for a defined period

• rental agreements outline specific terms and conditions for vehicle usage
• fleet management is central to the business operation (maintaining a group of vehicles for rental)