3364 Agency rent-a-car

Introduction

• What it is: This MCC encompasses businesses primarily engaged in renting cars and other vehicles.
• Risk level: Medium — Vehicle rental can lead to potential damage and unauthorized usage risks.
• Acceptance difficulty: Medium — While many PSPs support this MCC, specific vetting may be required.
• Typical business models: car rental agencies; van rental companies; truck rental services; ride-sharing vehicle fleets.
• For merchants: Expect moderate MDR rates; potential for reserved funds; thorough approval processes can apply.
• What PSPs expect: Valid business registration; detailed vehicle fleet descriptions; risk assessment protocols in place.

Payment Insights & Benchmarks

Merchants in the rent-a-car industry should be prepared for unique payment dynamics that can impact acceptance rates and operational costs. Payment methods often involve different levels of friction, and understanding these variations is crucial for optimizing revenue.

Payment methods

Cards: primary payment method, but may face higher decline rates due to fraud concerns and pre-authorization holds.

• E-wallets: increasingly popular for convenience but may have different acceptance levels based on the customer's region.
• A2A transfers: gaining traction, particularly for larger transactions; however, not all customers are familiar with this method.
• Corporate accounts: common in B2B transactions, but often require additional validation and may involve longer settlement times.

Authentication & security

Strong customer authentication (3DS) is often required, particularly for online bookings.

• Pre-authorization holds on cards can lead to declined transactions if the customer's limit is exceeded.
• Merchants must implement robust fraud detection measures to combat common rental fraud schemes, focusing on behavioral analytics.

Benchmarks (indicative, not guaranteed)

MDR: generally higher than standard e-commerce due to risk factors.

• Rolling reserves: may be implemented for higher-risk transactions, often within double digits.
• Settlement cycles: typically longer, with many rentals taking 7–14 days to settle.
• Chargeback ratios: tend to exceed industry averages due to disputes over deposits and service levels.
• Card approval rates: often lower, especially for non-traditional payment methods.

Key metrics to monitor

Decline rates segmented by payment method and customer demographics.

• Chargeback rates, focusing on the reasons for disputes.
• Average transaction value and frequency of large transactions to assess risk.
• Customer satisfaction scores related to the booking and payment process.

Risk & Compliance

Merchants operating under the MCC for Agency Rent-A-Car face specific risks related to fraudulent bookings and chargebacks, making compliance with PSPs and acquirers essential. These entities often implement rigorous checks and expect operators to proactively manage risks associated with customer transactions.

Chargebacks & fraud

Frequent occurrences of friendly fraud, where customers dispute legitimate charges after using rental vehicles.

• Cases of unauthorized use of personal information to book rentals, leading to costly chargebacks.
• Mitigation tools such as device fingerprinting and transaction monitoring are crucial to identify suspicious activity and patterns.
• Increased risk during high-demand periods such as holidays, necessitating stricter validation measures.

AML/KYC expectations

Comprehensive identity verification processes are expected, including government-issued ID checks and proof of address.

• Sanctions checks against known lists to ensure customers are not financially involved with prohibited entities.
• Source-of-funds verification is crucial, especially for high-value rentals, triggering manual reviews for significant transactions or unusual booking patterns.

Operational red flags

Lack of transparency about the rental company's ownership or management can raise suspicions for PSPs/acquirers.

• Unclear policies regarding damage deposits and payment methods can indicate potential fraud risks.
• Failure to implement or communicate cancellation and refund policies effectively.
• Non-disclosure of additional fees or rules associated with rentals may trigger compliance reviews.

Onboarding Checklist

Merchants in the AGENCY RENT-A-CAR sector must prepare a comprehensive onboarding package to streamline the process with PSPs or acquirers. A well-organized submission enhances the chances of swift approval and minimizes potential delays.

Legal & corporate documents

company registration and incorporation documents

• disclosure of beneficial owners (UBO) and corporate structure
• valid licenses relevant to vehicle rental operations
• policies: Terms of Service, Privacy, AML/KYC, Refund Policy

Financials & risk management

recent financial statements and cashflow forecasts

• liquidity or reserve model for vehicle and payment operations
• description of antifraud setup and monitoring tools

Product & marketing

demo access or screenshots of the car rental platform

• marketing plan, including traffic sources and promotional strategies
• geographic targeting information for service availability
• KYC flow details for customer reservations and validation

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 setup (hours of operation and contact methods)

• SLA for dispute handling and rental inquiries
• deposit and payment limits for vehicle rentals
• internal process for addressing customer complaints and chargebacks

Regulation & Licensing

Licensing and certification are essential for merchants in the Agency Rent-A-Car MCC, as payment service providers (PSPs) and acquirers will require proof of compliance before processing transactions. Recognition of licenses greatly depends on the merchant’s jurisdiction and their target markets.

Operator licenses

Local business licenses — required in many jurisdictions for legal operation.

• Car rental permits — specific permissions that may be needed in certain regions, often issued by local governments.
• Airport operating licenses — required for rental agencies operating on airport property, recognized by aviation authorities.
• Regional transportation or taxi licenses — may apply in areas with integrated transport regulations.
• Vehicle leasing licenses — may be necessary in some markets depending on fleet operations.

Geo-restrictions

Regions with stricter transportation regulations may impose limitations on car rentals.

• Certain countries may have outright bans on foreign-owned rental agencies operating without local partnerships.
• Restrictions may apply in jurisdictions that have high regulatory standards, impacting international operations.

Certifications & audits

PCI DSS compliance for safe handling of credit card information.

• Regular audits for corporate insurance compliance to protect against liabilities.
• Safety and maintenance inspections to meet local transportation safety standards.
• Environmental compliance audits if operating fleet vehicles under emissions regulations.

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 definitions are broadly similar, the emphasis on documentation and compliance varies across networks. Visa and Mastercard may require proof of vehicle availability and legitimacy, whereas American Express may focus on insurance status. Common reasons for non-acceptance can include insufficient documentation, lack of compliance with local laws, and questions regarding the legitimacy of the rental business.

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:

Always classify your business under MCC 3364 if it primarily involves car rentals. Misclassifying under other codes like 7512 or 7273 can lead to higher risks of chargebacks, processing issues, and potential account freezes.

Best Practices for Merchants

Merchants under the AGENCY RENT-A-CAR MCC face unique challenges related to payment processing, risk management, and operational efficiency. Implementing these best practices is essential to enhance acceptance, mitigate risks, and foster strong relationships with payment service providers (PSPs).

Classification & transparency

always use the correct MCC to ensure compliance; misclassification can lead to penalties or account termination

• display rental terms, conditions, and geographic restrictions prominently on your website
• maintain transparent billing practices, including clear descriptions on statements

Fraud & chargeback reduction

integrate 3DS or step-up authentication for transactions deemed high-risk, such as online reservations

• provide clear billing descriptors and confirmation emails to reduce confusion and dispute likelihood
• keep detailed logs of all rental transactions to support evidence gathering for chargeback representments

Payment acceptance optimization

offer multiple payment methods (credit cards, debit cards, digital wallets) to cater to customer preferences

• route transactions effectively based on location or payment method, optimizing for the lowest fees and highest success rates
• consider using separate merchant IDs (MIDs) for different rental types or geographic areas to tailor processing needs

Operational discipline

establish key performance indicators (KPIs) such as booking conversion rates, chargeback ratios, and customer satisfaction scores

• conduct regular compliance audits and reviews of payment processes to ensure adherence to standards
• designate a team member to manage disputes, ensuring timely resolution and tracking of each case

Payouts & liquidity

maintain sufficient liquidity buffers to accommodate rolling reserves required by payment processors

• implement automated anti-money laundering (AML) checks for all funds withdrawn over a specified threshold
• keep an eye on payout trends and unusual withdrawal patterns that may indicate potential issues or risks

Business Scope & Examples

This MCC covers businesses primarily involved in renting automobiles, including both traditional car rental agencies and online platforms that offer vehicle rental services. Merchants classified under this category typically provide services where customers make payments for short-term or long-term vehicle rentals.

Models

traditional car rental agencies (e.g., local and national companies)

• online car rental platforms (e.g., apps and websites)
• vehicle leasing services for personal or business use
• specialty vehicle rentals (e.g., luxury cars, vans, trucks)

Borderline cases

Car-sharing services — platforms allowing users to rent cars via peer-to-peer transactions; may fall under this MCC if rentals are structured similarly to traditional rentals.

• Ride-sharing services — companies like Uber or Lyft offering transportation without renting vehicles; not classified under this MCC since customers pay for rides, not rentals.
• Fleet management companies — businesses managing vehicle fleets for other entities; classify differently unless they directly facilitate rentals.

Signals for correct classification

customers pay for the use of vehicles for specified terms

• rental agreements outline conditions for vehicle usage and returns
• totals include taxes and fees specific to short-term rentals