by Debra Wei. Personal Finance Reporter
You’ve probably encountered a credit card security code before, whether you know it or not. This is the three or four digit number that is printed – not embossed – on all of your credit and debit cards, created to act as an extra measure of verification for transactions that are not completed in-person.
If you have a Visa, MasterCard or Discover credit card, your security code is the three-digit number listed on the back of your card, just to the right of your signature. In the event your card displays longer numbers, simply take the three last digits.
On an American Express credit card, the security code is a four-digit number listed on the front of the card, to the upper right of the card number.
When you provide your security code to a merchant, along with your credit card number and expiration date, the information is immediately sent to the credit card issuing bank for authentication. Once that is approved, your transaction will go through – if not, the transaction is instantly cancelled. Thus, it’s a no brainer why it’s called a ‘security code’.
To learn more about when you’ll need to provide your security code, why it’s important and more, read on below.
When Will I Need To Provide It?
You do not need to provide the credit card security code when you make credit card transactions in-person. This is because it is automatically retrieved and authenticated when the credit card’s magnetic stripe is swiped, ensuring that you are holding a genuine card and not a counterfeit.
On the other hand, providing the security code is almost always mandatory for credit card transactions that are not competed in-person. This includes any purchases that are made over the Internet or on the phone. Being able to produce this number is a sign that you are in possession of the credit card being used in the transaction and that the transaction therefore is not fraudulent.
It is important to note that although merchants are responsible for requesting your security code prior to approving your payment, not all merchants will choose to do so. Due to the fact that certain individuals may find their security codes illegible or struggle to find their code at all, some stores opt to skip the security code verification step in case it inhibits their customers’ ability to pay. In other words, they don’t want an additional step in the checkout process that could dissuade you from completing a purchase.
Why Is It Important?
The added protection that security codes provide is one of the reasons why fraud only impacts less than 1% of all electronic transactions – though the recent string of data breaches endured by our nation’s retailers would certainly make you think that
number is much higher. While credit card fraud can still occur even with transactions that require the code, making use of the extra layer of protection definitely helps mitigate the probability.
Therefore, when you are asked to provide your security code, merchants are essentially trying to ensure that you are in physical possession of a genuine card. The code cannot be found anywhere else as merchants are prohibited from storing it – along with PIN codes and magnetic stripe data – whenever received. Hence, because it is never stored, this renders it more difficult, though not impossible, for thieves to commit fraud even if they are already in possession of your other credit card information.
For this reason, there are numerous scams designed specifically to retrieve your credit card security code. The scammer will often already have your credit card number, full name and expiration date, lacking only the security code as the last piece of their puzzle. Though they utilize various methods to gain access to your code, many will choose to call you masquerading as your bank. It is very important to know that banks will never ask you for sensitive financial information over the phone so never provide it when asked. Always keep your security code private.
Credit Card Security Code Terms
One of the confusing things about a credit card’s security code is the variety of names used to describe it. Depending on which credit card network and type of card you use, the code can be indicated as:
- Card security code (CSC)
- Card verification number (CVN)
- Card verification data (CVD)
- Card verification or validation code (CVC or CVC2)
- Card verification value (CVV or CVV2)
- Card verification value code (CVVC)
- Verification code (V-Code)
- Signature panel code (SPC)
Hence, if you ever come across one of these complex sounding terms, don’t be alarmed– recognize that you’re simply being asked for your credit card security code.
Are There Alternatives to Credit Card Security Codes?
With technology moving at an exponential rate, we have now entered the age of digital wallets which do not use the kind of security codes we’ve been discussing. Instead, these virtual wallets – Apple Pay. for example – generate a unique identification code each time you make a purchase online or at the point of sale.
This dynamic security code – also known as a CVV3 or token cryptogram – replaces but serves the same purpose as a credit card security code, ensuring that the payment account is indeed yours, the use of these proxy security codes is what’s known as tokenization.