Online shopping is popular due to various reasons like easy access to multiple merchandisers, hassle-free payment and delivery, and many more as advertising by the marketing teams. To make online payment through the credit card, online shopping website will ask to put credit card information like credit card number, your name, expiry date, and your card’s CVV number.
Have you ever thought about the importance of the CVV number is? And why a unique 3-digit CVV code is required to complete the transaction?
What is a CVV number?
A CVV number is an acronym for Card Verification Value. All financial institutions that issue credit or debit cards have developed a system in which every card is provided with a unique CVV code.
It is a security feature for “card not present” payment (like online transactions where cardholder’s identity cannot be verified directly) card transactions instituted to reduce the incidence of credit card fraud.
Depending on the country and the card type, the CVV is also known by the following names
- Card Identification Number (CID) – Discover, American Express (four digits on the front of card)
- Card Security Code (CSC) – debit cards, American Express (three digits on the back of card)
- Card Validation Code (CVC2) – MasterCard
- Card Verification Data (CVD) – Discover
- Elo Verification Code (CVE) – Elo in Brazil
- Card Validation Number 2 (CVN2) – China UnionPay
- Card Verification Value 2 (CVV2) – Visa
All of these only for the protection of your credit and debit cards from frauds.
Where is the CVV code located?
- American Express cards have a four-digit code printed on the front side of the card above the number.
- Diners Club, Discover, JCB, MasterCard, and Visa credit and debit cards have a three-digit card security code. The code is the final group of numbers printed on the back signature panel of the card.
- New North American MasterCard and Visa cards feature the code in a separate panel to the right of the signature strip. This has been done to prevent overwriting of the numbers by signing the card.
What is the importance of CVV code?
“Card not present” transactions are a major route for credit card fraud because it is difficult for a merchant to verify that the actual cardholder is indeed authorizing a purchase. Therefore, CVV has been considered as the most important marker for fraud detection and prevention. MO/TO merchants during the card not present transaction (CNP, MO/TO, Mail Order / Telephone Order, MOTOEC) can store the credit card number entered but cannot store the CVV (as it is against the PCI-DSS guidelines).
The Payment Card Industry Data Security Standard (PCI DSS) is an information security standard for organizations that handle branded credit cards from the major card schemes.
Merchants can store the credit card number available on the magnetic stripes when the customer swipes the credit card on POS terminal or online payment gateways. However, the credit card number will not be enough to process the online payment until the valid CVV is entered. This makes it impossible to misuse the stored credit card information.
There has been news on credit card issuing companies being hacked or data security breach causing millions of credit card details stolen. But, thankfully the Credit Card CVV number is not stored in the database which makes it safe from the bad guys.
It is very easy for the thieves to get the credit or debit card number by placing a card reader device to the ATM or payment terminal but they cannot get the CVV as it is not present on the magnetic stripe. The credit card number cannot simply be used without the PIN or CVV number. To make the story short, CVV Protects You against the credit card Fraud.
Limitation of the CVV number.
- The use of the CVV cannot protect against phishing scams, where the cardholder is tricked into entering the CVV among other card details via a fraudulent website.
- There is now also a scam where a phisher has already obtained the card account number (perhaps by hacking a merchant database or from a poorly designed receipt) and gives this information to the victims (lulling them into a false sense of security) before asking for the CVV (which is all that the phisher needs and the purpose of the scam in the first place).
If you know any more limitation, please do mention in the comment section for public awareness.
Will I get the new CVV number when my current CVV number gets faded?
CVV is must needed for the online transaction and it is available on the grids at the back of the card. If your grids have faded and you can’t see the CVV numbers, it might be better to opt for a new card because the banks will not reissue CVVs. They are given once along with your card. If your CVV has faded, banks might consider the card to be damaged.
I hope, you liked the article. Now that you are aware of the role that CVV plays on the credit card and its importance, share this information with others as well to protect people from being a part of a credit card fraud. Feel free to put your suggestion and feedback in the comment section of this blog. I would be happy to read them.
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