CVV/CVC

Card Verification Value (CVV) or Card Verification Code (CVC) is the three or four-digit security code printed on credit cards, used to verify that the person making a card-not-present transaction physically possesses the card.

The CVV (used by Visa, Mastercard, and Discover) or CVC (used by some other card brands) is a security feature designed specifically for card-not-present transactions such as online, phone, or mail orders. Visa and Mastercard cards display a three-digit CVV on the signature panel on the back of the card, while American Express uses a four-digit code (CID - Card Identification Number) printed on the front of the card above the account number.

Unlike the card number and expiration date, the CVV is not stored in the magnetic stripe or EMV chip and should never be stored by merchants after a transaction is authorized, as storing CVV data violates PCI DSS requirements and can result in severe penalties. Because the CVV must be physically read from the card, requesting it during card-not-present transactions helps verify that the person making the purchase actually has the physical card rather than just stolen card numbers.

For merchants, requiring CVV verification for card-not-present transactions provides multiple benefits including reduced fraud risk as fraudsters using stolen card numbers often don't have the CVV, lower chargeback rates since CVV matching demonstrates due diligence in fraud prevention, and qualification for better interchange rates as CVV verification helps transactions qualify for lower-risk interchange categories. Most payment gateways automatically check CVV during transaction authorization, with the issuing bank returning a match, no match, or not processed status. Merchants should configure their systems to decline transactions with CVV mismatches to minimize fraud risk.

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Related Terms

3D Secure

An authentication protocol for online card transactions that adds an additional verification layer between the cardholder and issuing bank, shifting fraud liability from merchants to card issuers when properly implemented.

ACH Payment

Automated Clearing House payment is an electronic bank-to-bank payment method that transfers funds directly between bank accounts through the ACH network, typically used for direct deposits, bill payments, and recurring transactions.

Acquirer

A financial institution that processes credit card payments on behalf of merchants, maintains merchant accounts, and facilitates the settlement of funds from card-issuing banks to merchant bank accounts.

Address Verification Service (AVS)

A fraud prevention tool that compares the numeric portions of a billing address provided during a transaction against the address registered with the card-issuing bank, returning match result codes to help merchants assess transaction risk.

Aggregator

A payment service provider that enables multiple merchants to process card transactions under a single master merchant account rather than each merchant having their own dedicated merchant account, common with services like Square, Stripe, and PayPal.