Posted by: John S Kiernan

A credit card security code is the three or four digit number that is printed – not embossed – on all credit cards. The length and location of a credit card’s security code depends on what network the card is on. If you have a Visa, MasterCard or Discover credit card, it will be three digits on the back of your card, just to the right of your signature. But an American Express credit card’s security code is a four-digit number listed on the front of the card, slightly above and to the right of the card number. In the event your card displays longer numbers, simply use the last three or four digits.

Regardless of what kind of card you have, credit card security codes serve the same purpose. 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.”

Below, you can learn more about how to find your credit card’s security number, when you’ll need to use it, how it protects you and more.

1. When You Need Your Credit Card Security Code
2. Why Credit Card Security Codes Are Important
3. Other Names for Credit Card Security Codes
4. Credit Card Security Code Alternatives

When You Need Your Credit Card Security Code

You don’t need to provide the credit card security code when making purchases in person. It’s automatically retrieved and authenticated when the credit card’s magnetic stripe is swiped.

But the security code is almost always mandatory for credit card transactions completed online or over the phone. Being able to produce this number signals that you’re in possession of the card being used, which makes it less likely that the transaction is 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 Credit Card Security Codes Are 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.

Other Names for Credit Card Security Codes

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.

Credit Card Security Code Alternatives

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.

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via Finance Xpress