3389 Avis rent-a-car

Introduction

• What it is: This MCC covers rental car services provided by various companies.
• Risk level: Medium — The nature of vehicle rentals can involve substantial liabilities.
• Acceptance difficulty: Medium — Some payment processors may require additional scrutiny due to potential chargebacks.
• Typical business models: car rental agencies; vehicle leasing firms; airport shuttle services; truck rental companies.
• For merchants: Expect moderate MDR rates; potential for higher reserves due to vehicle value; thorough approval process.
• What PSPs expect: Complete business registration; insurance document for rental vehicles; clear terms of service on website.

Payment Insights & Benchmarks

Merchants in this MCC should prepare for specific challenges in payment processing that differ from standard e-commerce. The acceptance dynamics heavily depend on customer behavior, transaction types, and fraud vigilance.

Payment methods

Cards: commonly used, but may face scrutiny based on rental duration and client location, affecting approval rates.

• E-wallets: gaining traction for quick transactions and convenience, but not universally accepted.
• A2A payments: popular for direct bank transfers, particularly for large transactions or security deposits.
• Payment plans: increasingly offered, allowing customers to manage costs over time, but may introduce additional risk.

Authentication & security

Strong Customer Authentication (SCA) measures, like 3DS, are frequently required to reduce fraud risk.

• SCA can lead to higher declines, which may impact conversion rates for customers with intermittent internet access.
• Continuous fraud monitoring is essential, especially for high-value rentals, to identify unusual transaction patterns.

Benchmarks (indicative, not guaranteed)

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

• Rolling reserves: may be significant, as rentals entail a higher risk of chargebacks and defaults.
• Settlement times: typically longer, often exceeding a week, due to transaction verification processes.
• Chargeback ratios: usually above average, influenced by customer disputes over rental agreements.
• Card approval rates: can be lower than average, particularly for international transactions.

Key metrics to monitor

Authorization rates segmented by payment method and customer demographics.

• Chargeback reasons categorized into fraud and service disputes to identify trends.
• Average rental value and duration to manage risk effectively.
• Cancellation and no-show rates to adjust payment acceptance strategies.

Risk & Compliance

Merchants operating under the MCC 3389 are subject to significant scrutiny due to the potential for fraud and chargeback disputes in the car rental sector. Payment service providers (PSPs) and acquirers typically enforce rigorous risk management strategies, placing the onus on merchants to proactively tackle issues such as fraud, AML/KYC compliance, and operational integrity.

Chargebacks & fraud

Common instances of friendly fraud, where customers falsely claim transactions were unauthorized.

• Repeated booking and cancelling patterns to exploit free rental periods or promotions (bonus abuse).
• Use of stolen payment credentials for transactions is prevalent.
• Mitigation tools include device fingerprinting, velocity checks, and customer verification through ID checks at the time of rental.

AML/KYC expectations

Merchants are expected to implement robust identity verification measures (such as government-issued IDs) that include sanctions and politically exposed persons (PEP) checks.

• Source-of-funds verification should be conducted, particularly when rentals are of high-value or involve unusual transaction patterns.
• Manual review triggers can include multiple rentals within a short time frame or usage of mismatched payment methods compared to the renter's profile.

Operational red flags

Lack of transparency in ownership, especially in franchises or white-label arrangements, poses significant concerns.

• Use of shady traffic sources or unverified third-party partners to drive bookings can raise red flags.
• Inadequate policies around cancellations and refunds not clearly communicated to customers may signal operational weaknesses.
• Insufficient processes to prevent vehicle over-subscription or double-booking situations.

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 rental 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
• rental terms, conditions, and pricing structures
• internal process for chargeback investigation and documentation

Regulation & Licensing

Licensing and certification are essential for merchants in this MCC, particularly for those operating within the car rental sector. Payment Service Providers (PSPs) and acquirers require assurance that vendors uphold relevant laws and industry standards, and recognition of licenses can vary based on jurisdiction and target market.

Operator licenses

Local business licenses — typically required to legally operate within a state or municipality. Recognition varies based on local laws.

• Vehicle rental licenses — certain states or countries mandate specific licenses for renting vehicles; compliance is necessary for legal operation.
• International car rental insurance provisions — a necessity in many regions to protect both the operator and the consumer.
• Franchise licenses — applicable for those operating as part of a larger rental brand; recognition can depend on contractual agreements with the franchise.
• Some regions may have environmental permits related to vehicle emissions, impacting rental operations.

Geo-restrictions

Countries with strict regulations on vehicle rentals may impose restrictions on foreign operators.

• In the US, state-specific licenses can limit operations to certain jurisdictions; cross-state rentals may require additional compliance.
• Some markets may restrict rentals from non-compliant or unlicensed operators, leading to compliance issues.

Certifications & audits

PCI DSS compliance for processing payment card transactions securely.

• Regular vehicle safety inspections and maintenance audits to ensure rental fleet compliance.
• Customer service quality assessments and audits to maintain service standards.
• Insurance liability assessments to meet local regulatory requirements.

Official Definitions & Network Comparisons

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

Explanation:

The definitions among networks are closely related but vary in focus, such as emphasizing “automotive” versus “vehicle” rentals. Some networks might have stricter requirements for geographic areas where car rentals are offered. Common issues that lead to denial include lack of licensing and unclear booking practices.

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:

If your business primarily revolves around vehicle rentals or related services, classify under MCC 3389. Avoid using other codes that do not accurately represent your primary business to minimize risks like chargebacks or account issues.

Best Practices for Merchants

Merchants under this MCC face higher scrutiny and must actively manage payments, risk, and operations. The practices below help build sustainable acceptance and reduce exposure to disputes and PSP restrictions.

Classification & transparency

always use the correct MCC; attempts to bypass classification often lead to account closure

• clearly display rental policies, terms, and geographical restrictions on the website
• maintain transparent business models and billing descriptors related to rentals

Fraud & chargeback reduction

implement 3DS or step-up authentication for high-risk transactions especially for online reservations

• use clear billing descriptors, provide instant booking confirmations via SMS/email, and ensure responsive customer support
• log transaction events and rental details to build a solid basis for dispute representments

Payment acceptance optimization

support multiple payment methods (credit cards, debit cards, digital wallets) to reduce dependency

• route bookings based on customer location, payment method, and test different PSP performances regularly
• use separate merchant IDs (MIDs) for different service types, such as car rentals versus ancillary services, to better manage scheme requirements

Operational discipline

track KPIs such as authorization rates, decline codes, chargeback ratios, average revenue per booking, and customer lifetime value

• conduct routine compliance audits, update operational policies regularly, and perform test bookings to ensure system integrity
• designate a dedicated team or individual for managing disputes, ensuring they respond within established service level agreements (SLAs)

Payouts & liquidity

maintain liquidity buffers to accommodate rolling reserves and extended settlement periods common in the rental industry

• automate anti-money laundering (AML) checks for customer withdrawals, especially above threshold amounts
• closely monitor payout transactions and flag any suspicious rental activities or withdrawal patterns

Business Scope & Examples

This MCC primarily encompasses businesses engaged in the rental of passenger cars and other vehicles, as well as associated services. Merchants classified under this category typically provide customers with short-term leasing options for automobiles, vans, and motor vehicles, facilitating transportation needs.

Models

car rental agencies (e.g., Avis, Hertz, Enterprise)

• truck and van rental services
• bike rental businesses
• car-sharing platforms

Borderline cases

Ride-sharing services — platforms like Uber or Lyft, which connect drivers with passengers; generally classified differently due to their service nature.

• Leisure vehicle rentals — renting recreational vehicles (RVs) or boats; may need to be assessed separately based on specific business offerings.

Signals for correct classification

business primarily focuses on renting vehicles to customers for short-term use

• customer payment is made for the rental duration rather than for services related to transportation
• service includes insurance and roadside assistance as part of rental agreement