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CVV2 codes play an important role in payment security. Learn what CVV2 numbers are, how they protect your business, and other security measures you can take.
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Think about the last time you made a purchase online or over the phone. That three or four-digit code on the back of your debit/credit card is your CVV2. This is an added step of security designed to help consumers and business owners.
But do you really need CVV2 codes? And can you bypass asking your customers for theirs? Keep on reading to find out.
Table of Contents
A CVV2 is found on the back of credit and debit cards. It is a three or four-digit number designed to ensure that anyone making a purchase has the card physically in hand. These codes aim to prevent the unauthorized use of a credit card in a card-not-present transaction.
Card-not-present transactions are typically online purchases, but they also include manually entered transactions (such as orders placed over the phone) as well.
Payment brands don’t agree on the same terms for a CVV, so you will encounter more than one name for these numbers. All of the following terms refer to the same thing:
CVV codes are built into magnetic strips/chips and are automatically transmitted when you swipe/insert/tap your card.
A CVV2 is simply the number printed on the back of the card and is not built into the card itself.
| Issuer | Name | Location | Number Of Digits |
|---|---|---|---|
| Visa | CVV2 | Back of card | 3 |
| Mastercard | CVV2 | Back of card | 3 |
| American Express | CID | Front of card | 4 |
| Discover | CID | Back of card | 3 |
These codes aren’t transmitted when a credit card is swiped, dipped, or tapped during a card-present transaction. The CVV2 number is another layer of security that helps merchants prevent different types of fraud and reduce their liability.
It is legally required for you, as a merchant, to take a CVV2 from customers for card-not-present transactions.
Online shoppers need a CVV2 code to prove that the actual cardholder is making the purchase when doing card-not-present transactions. It is the best way to prevent online credit card fraud that we have at this time.
Additional benefits of CVV2 codes include reducing the costs of credit card fraud and preventing chargebacks for merchants.
Technically speaking, you can’t.
That said, there are ways customers can use their card where they don’t need to enter their CVV2 every time they purchase from you. Allowing (legal and secure) options for customers to avoid having to get up to find their card and CVV2 number will reduce shopping cart abandonment.
Some different ways your customers can pay that don’t require their CVV2 are digital wallets, including PayPal, Google Play, subscription memberships/recurring billing, and Click to Pay.
Now that you know the basics of CVV2 and how the different variations of these security codes impact you and your customers, you’re ready to take card-not-present transactions.
Make sure that your payment processing company is up to date with the latest PCI compliance standards so you don’t have to deal with fines and other punishments for non-compliance.
Do you need to find a secure payment processor? We have plenty of resources to help you find the best online payment processors for your small business.
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