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According to Statista, in 2020, India ranked 11th among the countries with the most credit card users. And this number keeps going up!
If you, too, are a credit card owner, then it is essential to know the different components that make your card unique and safe. Apart from the chip and the magnetic strip, one distinguishing safety feature of a card is the CVV number. This number facilitates safe online purchases and prevents fraud.
You must know exactly what your CVV number means and how it makes your transactions secure. So, read this article till the end to get clarity on what is a CVV number in credit cards.
Credit card manufacturers use a proprietary algorithm to assign a unique code to each new card randomly. This code is called the CVV or the Card Verification Value. The CVV is a three-digit code found on the back of your card.
You must enter this number for any online transactions or transactions that do not need your card to be physically present with you. It provides an additional security layer for transactions not using the card’s magnetic strip.
The CVV number has two parts – the magnetic strip and the three-digit number.
The magnetic strip on your card protects the initial section. It contains critical and unique identification information about your credit card. When you swipe your card through a magnetic reader machine, the strip authenticates the card and, thus, makes the transaction safe.
The second component consists of digits that must be entered when doing an online or over-the-phone transaction. This three-digit security number is what makes your online transaction safe and secure.
Generally, a credit card CVV number is a three-digit code on the back side of a credit card. For instance, Mastercard and Visa credit cards have the code on the backside, right next to the cardholder’s signature below the magnetic strip.
However, some credit card issuers use a four-digit CVV and position it above the cardholder’s name on the card’s front side.
CVVs are not just arbitrary three- or four-digit numbers. Instead, credit card issuers generate these numbers randomly using their proprietary algorithms to ensure safety and prevent fraud.
They do this by combining four pieces of information:
1. The primary account number
2. A pair of DES (Data Encryption Standard) keys
3. The four-digit expiry date
4. A three-digit service code
The exact algorithms they use for CVV generation are unknown, and rightfully so.
The most important function of the CVV is to verify the owner’s identity and protect the credit card from fraud, theft, or unauthorised transactions. Let us understand in detail why a credit card’s CVV number is essential:
While the chip and the magnetic strip on your credit card help you make payments safely using a merchant’s POS machine, CVV enables you to make safe transactions when you cannot use the swipe-to-pay feature. It is especially helpful during online shopping and making payments using mobile apps.
When using an online merchant’s payment gateway, the CVV is a required field you must fill in along with your name and card’s expiration date to complete the transaction. With this, the users demonstrate that the card is in their hands. This is a simple layer of protection maintained by banks to reduce fraud.
Additionally, a person may obtain your card details, like name and expiry date, from business records and transaction history. However, Industry Data Security Standards forbid the storing of CVV numbers. As a result, unless one has access to the card, this number is tough to estimate, even for advanced fraudsters.
For security reasons, financial institutions strongly advise not to share sensitive information such as your credit card PIN on random online portals. But for the transaction, you need to put in these details.
But how do you ensure that the transaction remains secure? It is through your CVV number. That lender authenticates your transaction on web portals along with other card details.
In some cases, you can save your credit card details on e-commerce websites and mobile wallets. However, even if you record your credit card information on these online portals, they do not have the authority to save your CVV.
This is why you must enter your CVV each time you make a purchase, even if you have previously saved your credit card information on the merchant’s online portal.
This demonstrates that a credit card CVV is considered a crucial security component because it functions as an additional layer of security, making fraud and online theft impossible. As a result, it is critical that you keep your CVV private and do not disclose it to anyone else.
If you input the CVV code wrongly, the card issuer will decline your transaction. At the same time, you will receive an alert that your credit card was used to attempt a payment. You can then verify if you or someone else used the card and request the card issuer to block the card.
Even though CVV in cards provides good security, credit cards are vulnerable to phishing and other forms of cybercrime. Credit cards are becoming more vulnerable since hackers can conduct illegal transactions using card details other than the CVV. Hence, you should keep these few things in mind to make your transaction safe –
1. You must not share images of your credit card details and CVV on social media or any other internet platform.
2. Ensure your laptop/computer has antivirus software with real-time web protection.
3. Only enter your CVV while transacting from a secure website or by phone with a trustworthy merchant. URLs for secure websites always begin with https (rather than http), where the letter “s” signifies “secure.” Most modern websites use the layer technology of secure sockets.
4. Never give out your card information, especially your CVV number, in response to SMSs, emails, or phone calls from someone pretending to be your bank’s representatives and requesting your card information.
5. Do not respond to emails containing unusual links/images from unknown sources.
CVV, a mere three-digit number, is an essential part of your online transactions. They are the reason why you can make safe and secure payments via your debit or credit cards.
At Tata Capital, we offer credit cards at competitive interest rates and exciting rewards. So, contact us today to start your journey of safe and secured transactions!
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