You've probably entered the security code on the back of your credit card more times than you can count. So, what does it actually do?

The number on the card has many names. Depending on who issued the card determines the name:

  • Visa: Card Verification Value (CVV)
  • American Express: Card Identification Code (CIC)
  • MasterCard: Card Verification Code (CVC)
  • Discover: Card Verification Data (CVD)

No matter what the company calls it, the CVV has one purpose - to verify that the cardholder has the card in their possession. Entering the wrong code will almost always result in the transaction being declined.

Merchants are also prohibited from storing this value in their database and card vault. The CVV is not part of the data stored on the magnetic stripe, or on the EMV chip either. If a database is hacked and credit card numbers are stolen, the hackers would still not have the security code. Most ecommerce websites now require CVV at checkout.