CVV2

CVV2 is defined as the 3-digit number on the backs of most credit cards or the 4-digit number on the front of American Express cards that help to defer fraudulent transactions.
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CVV2

The CVV2 is a three-digit number on the back of most credit cards. It is also a four-digit number located on the front of American Express cards. The number is a safety measure to help prevent fraud.

CVV2 codes came into use in 1997 with Mastercard credit cards.

For most card-not-present transactions the POS (point of sale) system will require the entry of the three or four digits. This is just one more step to prevent a thief from lifting your number and using it.

The CVV2 is almost always used over the phone as phone orders and payments can be more difficult to track.

Payments made online will sometimes use the CVV2, but not always, especially as online orders leave a digital trail that credit card companies can track.

Some companies use the zip code linked to the card in a similar capacity.

Without the CVV2 code, you cannot process a credit card transaction that has been entered manually. However, online companies that require address verification can get around the need for the CVV2 since they have the purchaser’s full information.

There are other safeguards found within the card. There is a similar code to the CVV2 that is found in the magnetic strip that helps validate the card to the POS.

Every once in a while a card swiped will also require the entry of the CVV2. This double verification ensures that the two numbers match up to the same card and helps protect the business from potential fraud and chargebacks.

The two numbers are not the same. The CVV2 is not stored in the magnetic strip or the chip. It provides a second level of card identification.

For peace of mind for both customer and retailer, the CVV2 is not stored when the card is swiped or the CVV2 is entered. This is specifically done to separate the two numbers in the unlikely event of a security breach.

These layers of security are in place not only to protect the consumer and the business, but also to help prevent the added expense the credit card companies accrue fighting fraud.

Credit card companies have a varying degree of fraud protection for their customers. Sometimes this is as simple as a customer disputing a charge.

Regardless, fraud costs everyone. It costs the credit card company both in revenue and in the salary paid out to track fraud. But this cost is generally passed on to the customer.

In sum, the CVV2 is in place to help prevent fraud from happening and to help keep the costs down for the credit card company and eventually for the cardholder.

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