What is a Credit Card Security Code?
You might have noticed the four-digit or three-digit number on the back of your credit card next to the signature line.
It is what’s known as a card identification (CID) or the card verification value (CVV) and it’s a security feature that adds an extra level of protection so criminals can’t just make unauthorized purchases using your card.
These codes came about in the late 1900s and early 2000s as card companies responded to the boom in online shopping.
Mastercard holds the distinction of being the first to introduce them in 1997, followed by American Express in 1999 and then Visa in 2001. Today, it is a standard feature for all major credit and debit cards all over the world.
Card Security Code Precautions
Credit card security codes come in a variety of acronyms such as:
- CVV or CVV2 (Card Verification Value Code)
- CSC3 (Card Security Code)
- CVC or CVC2 (Card Verification Code)
- CID4 (Card Identification Number)
If your card’s security code is unreadable for any reason, call the issuing financial institution using the number on the back of your credit card.
Every financial institution adopts its own guidelines in handling illegible security codes but most probably, they will have to reissue the card in question.
The security code is a safety feature just like your PIN so, you will have to exert some protection over it. As a rule, if you have a secure connection, you can safely provide it when doing online transactions.
For security reasons, merchants cannot and should not retain or store the code. As a precaution, never provide your security code to anyone. Never provide it via email because an email is not necessarily a very secured communication.
If someone else has access to your security code, card number, and its expiration date, an online merchant may think that you are making the transaction even if it’s somebody else who may have taken your card.
The Security Code is Not The Same as Your PIN
Your PIN is your numeric Personal Identification Number and it’s entirely different from your card’s security code.
A PIN identifies a valid and authorized transaction that is going to take place in an ATM be it withdrawal or a cash advance.
On the other hand, a security code can verify if the card is in the possession of the cardholder at the time of the transaction.
The verification is done by the retailer that can ask for the number during the processing of the transaction. Both the PIN and security code are important safety features – to protect them from the eyes of the public and never share them with anyone.
Do not enter your PIN on a website when what it’s asking is for your CVV.
Remember that the PIN allows you to make a transaction from an ATM or when you’re making a purchase with your credit card.
How to Find Your Credit Card Security Code
For Visa, Mastercard and Discover credit cards, you can find the three-digit number CVV at the back of the card. It is the 3-number combination on the right side of the signature box.
American Express uses a Card Identification (CID) number which is a 4-digit code which you can find on the front of the card above the account number.
How to Use Your Credit Card Security Code
It’s really a simple process when it comes to using the CVV. The cardholder selects a product online and checks out his virtual ‘shopping cart’.
When the payment page appears, the merchant will ask for some information such as name, billing address, credit card number and the CVV. The merchant sends the code to the card issuer to request for authorization.
The issuer’s system verifies the information including the VCC for validity as well as if the card has an available credit then sends back a message to the merchant whether they are honoring the transaction or disapproving it.
Benefits of Security Code
The use of the CVV is the convenient choice for merchants who do not need the physical card. Of course, merchants would use other security procedures such as address verification to add another layer of protection to the CVV to prevent fraudulent transactions.
The security layers make it difficult for hackers and thieves to use stolen card numbers to make unauthorized purchases.
Thereby, reducing fraud and subsequently, chargebacks. Following security protocols can keep the customers safe and at the same time save money for the business.
Even with the full migration to chip-equipped EMV cards, U.S. financial institutions will continue to use these security codes that appear on the back of the cards as what they are doing now.
Limitations of Credit Card Security Code
It is not at all mandatory for a merchant to request a CVV or CID code so you may notice that some merchants don’t.
In some merchant’s payment gateway websites, they will ask for it on your first purchase and their system will ‘memorize’ the security code.
This way, if you make a subsequent purchase using the same card, they won’t ask for it anymore. The code is already in their system.
It is highly probable that some identity thieves may hack the retailer’s website or payment gateway and steal your credit card number and CVV/CID codes.
The CVV or CID codes only make it harder for thieves to use your credit card number fraudulently.
However, it doesn’t guarantee protection. Since your security code is just a layer among many security layers to help protect you, be careful when you share it over the phone. Also, remember never to share it on email because it is not a secure mode of communication.
Protecting your code and other relevant information is super important.
If a thief gets hold of your credit card number, its expiry date, and your security code, they can already make an online purchase. The retailer’s website will assume that you, as the authorized cardholder, is making the transaction and not someone else.