When making purchases with your credit card, you must wonder how your credit card provider prevents you from fraud.
There are several layers of security that prevent fraud and overcharging in a credit card. One of the things that help this process is your credit card CVV. But what is CVV in credit card and how does it work? Learn all about it in our guide.
What is CVV in Credit Card?
The CVV or Card Verification Value is an authentication procedure that credit card companies use to reduce fraud, especially with the prevalence of transactions made online. It functions as the main security feature for “card not present” transactions.
Some banks and cardholders call it as Card Security Code (CSC), Card Verification Data (CVD), Card Verification Value Code, or Card Verification Code (CVC). The reason for these different names depends on the credit card brand. For example, Discover and American Express refer to it as “CID” or Card Identification Code.
Where Can I Find My CVV Number?
For Visa, Mastercard, and other credit card brands in the Philippines, the CVV is a three-digit number found at the back of your credit card. It is located below the magnetic stripe. Take note that some credit card brands like American Express use four digits. You may notice this when you compare credit cards.
How Does CVV in Credit Card Work?
Developed by Michael Stone in 1995, the CVV was originally an 11-character alphanumeric code. The UK Association of Payment Clearing Services adopted the code and eventually revised it to three-digits. Mastercard was among the pioneers, issuing CVV numbers on their cards starting in 1997. American Express issued them in 1999 in response to the growth in transactions made online. Visa in the United States began issuing them in 2001.
Credit card providers in the Philippines require merchants to ask for your card's CVV when processing "card not present" transactions. When you report a stolen credit card, the three-digit code prevents the unauthorized from using your card and stealing your information.
A CVV number can also be found in debit cards. It works the same way as CVV in credit cards.
What are the Types of Credit Card Security Codes in CVV?
There are a few types of credit card security codes in CVV but the main three are as follows:
- The CVV1 or CVC1 is encoded on the second track of your card’s magnetic stripe and is used for “card present” transactions. This validates that the card is in the owner's possession and allows the code to be automatically retrieved once the card goes through a payment device.
- Meant for "card not present" transactions, the CVV2 or CVC2 validates a payment even without the cardholder's actual credit card. This code verifies transactions made online or over the phone.
- The third is the iCVV or dynamic CVV, which is used in contactless cards and chip cards. The CVVs on these kinds of cards constantly refresh, making it more difficult to copy.
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When using your credit card, be aware of your surroundings and the merchant you're transacting with. Ensure the security of your information by keeping an eye on your card at all times.
Source:  The Merchant’s Guide To Credit Card Security Codes (CVV, CVV2, CVC) & CVV Checks (Hale, Merchant Maverick, 2021)