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Understanding Credit Card CVV Importance and Functionality
Posted on Monday, April 22nd, 2024 | By IndusInd Bank
With the increase in the number of online transactions, financial security has become of prime importance because, along with the increasing use of digital banking, cybercrime has risen as well. One of the most widely used mediums of online transactions is credit cards, and when using these, we are required to provide the correct CVV code for a successful transaction. CVV full form is Card Verification Value. This three-digit number, located on the back of credit cards, plays a crucial role in ensuring the safety and integrity of electronic payments. But what exactly is CVV, and why does it matter? Read on to know more.
What is Card Verification Value?
CVV is a code included as a security feature to authenticate online transactions. Enhanced security features suggest that the card security code, CVV, is used in two ways. It is either embedded in the magnetic strip, which is read by the machine to authenticate in-person financial transactions or printed on the back of the credit or debit card to refer to when performing online transactions. Card Verification Value CVV is also referred to by numerous names, such as Card Security Code CSC, Card Identification Number CID, Card Validation Code CVC2, etc.
Why Does CVV Matter?
When you apply for a credit card, here are two main reasons why CVV is important:
1. Enhanced Security: CVV adds an extra layer of security to credit card transactions by verifying that the person making the purchase physically possesses the card.
2. Protection against Fraud: By requiring the CVV for online transactions, merchants can reduce the risk of unauthorised purchases with unethically acquired or stolen credit card information. Even if a fraudster obtains the card number and expiration date, they would still need the CVV to complete a transaction successfully.
What does the CVV code reveal?
CVV is used to verify cards/transactions. The CVV code reveals the bank numbers, the expiration date and the service code. It is a unique code known only to the issuing bank. This unique code, typically three or four digits, is crucial for verifying and authenticating the card. Without the CVV, transactions remain unauthenticated, safeguarding the card owner’s interests. It also protects you against hackers who may have gained unauthorised access to your card.
How to locate the CVV number on Debit and Credit Cards?
Locating the CVV on your credit or debit card depends on the card network. For Visa, MasterCard and RuPay cardholders, the three-digit code is situated on the back of the card, either inside or near the signature strip. Conversely, American Express card users will find the four-digit CVV displayed prominently on the front, positioned above the Amex logo.
Does my card’s PIN match the CVV?
No, your card’s Personal Identification Number PIN is distinct from the CVV. The PIN is utilised for conducting in-person transactions with the card or at ATMs, ensuring secure access to funds. On the other hand, the CVV is employed exclusively for online or phone-based payments, serving as a verification measure to authenticate transactions.
Also Read:A Step-by-Step Guide: Setting Up Your New Credit Card PIN
In the digital age, when you can avail yourself of credit cards for free and online shopping/ electronic payments are prevalent, safeguarding sensitive financial information is paramount. A credit card CVV number serves as a crucial security measure in this regard, helping to authenticate transactions and mitigate the risk of fraud. By understanding the importance of CVV and adhering to best practices for its use, both consumers and merchants can contribute to a safer and more secure online payment ecosystem.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.
