Mail order and
telephone order (MO/TO) and other card-not-present transactions have
higher fraud rates than face-to-face transactions. When a card's magnetic
stripe is read by a point-of-sale (POS) terminal, Visa's Card Verification
Value (CVV) or MasterCard's Card Validation Code (CVC) can be verified
during the authorization. However, when the card is not present the CVV or
CVC cannot be validated. To help reduce fraud in the card-not-present
environment, acquirers, merchants, and issuers can use the CVV2 or CVC2
program.
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What is CVV2 or CVC2?
The CVV2/CVC2 is
a three-digit security code that is printed on the back of cards. The number
appears in reverse italic at the top of the signature panel at the end (see
sample). This program helps validate that a genuine card is being used
during a transaction. All MasterCard cards, both credit and debit, were
required to contain CVC2 by January 1, 1997; all Visa cards must contain
CVV2 by January 1, 2001.
How does CVV2 or CVC2 Work?
Card-not-present merchants are being directed to ask cardholders for
CVV2/CVC2 when cardholders place orders. Merchants ask the cardholder to
read this code from the card. The merchant then asks for CVV2/CVC2
verification during the authorization process. The issuer (or processor)
validates the CVV2/CVC2 and relays the decline/approve results during the
authorization process. Merchants, by using the CVV2/CVC2 results along with
the Address Verification Service (AVS) and authorization responses, can then
make more informed decisions about whether to accept transactions.
Changes to
signature panel?
Previously the three-digit CVV2 or CVC2 number followed the 16-digit account
number printed on the card's signature panel. The 16-digit account number is
now truncated to four digits on the signature panel. Beginning March 31,
2000, cards issued by Equifax will show the last four digits of the account
number followed by the three-digit CVV2 or CVC2 number on the card signature
panel.
This change makes it easier for cardholders to sign their cards. It also
makes it easier for merchants to compare the signature on the card to the
one on the sales draft; no longer will those 19 digits (16 + 3) get in the
way of verifying a signature!
Why am I asked for the CVV2 or CVC2
number?
For the above mentioned security processing reasons and because merchants
get charged a higher percentage on credit card processing fees for
transactions without CVV2 & CVC2 numbers entered. |
