Javelin Strategy & Research stated in “2013 Identity Fraud Report” that financial frauds related to credit and debit cards exceeded $21 billion globally. “2016 Global Consumer Fraud Report” ranked India in the 5th place among countries most susceptible to card frauds. Reserve Bank of India (RBI), along with National Crime Records Bureau (NCRB) reported 921 cases of fraud related to online transactions involving amounts over Rs.1 lakh.
Financial institutions issuing credit and debit cards, on the other hand, have introduced advanced security measures such as CVV number to combat the alarming rise of online transaction frauds.
What is CVV?
For individuals wondering what is CVV, it stands for Card Verification Value that is denoted by a 3-digit or 4-digit number. CVV is meant to minimise financial frauds in case of card-not-present purchases on e-commerce platforms and payment gateways.
CVV is located at the signature box on the flip side of debit and credit cards beside the card number. The alternate side of a credit card usually displays the last 4 digit of the card identification number.
CVV is alternatively referred to as Card Security Code or CSC, which is not equivalent to the Personal Identification Number (PIN) as customized by credit card users. CVV codes are stipulated and printed on cards by card issuers to create an additional layer of security to diminish the possibility of credit card fraud. These codes help online retailers and financial institutions authorize transactions on behalf of individuals in case they are not physically present at that time.
CVV is however not required in case of point-of-sale (POS) transactions where cardholders are physically present.
How does CVV minimise online frauds?
Financial institutions issue CVV as a vital security measure against fraudulent practices involving purchases with the use of chip-enabled credit and debit cards on the internet. CVV helps individuals secure their online transactions in the following ways –
- Verification of transactions
CVV code is the most essential aspect of debit and credit card transactions. Individuals cannot complete their online transactions unless they provide their CVV code stated on their cards. This code helps individuals authenticate their transactions online where there is no direct contact between the seller or retailer and the buyer.
Apart from providing the card’s PIN number, cardholders also have to enter their CVV number in a separate bar. During an online transaction, the e-commerce platform transfers the CVV code entered by the user to the card issuer. The issuer then verifies the CVV number against the card identification number to check its validity. The e-merchant receives either approval or disapproval statement from the issuer whereby the transaction is either successful or declined.
Additionally, individuals should know the types of credit card frauds and how to avoid them to secure their online transactions.
- CVV is not preserved
E-commerce platforms are not authorized to store or preserve CVV codes after the completion of a particular transaction. Even though e-merchants are allowed to save the name of the cardholder, card number, and expiry date of the card in their encrypted database, cardholders are required to enter the CVV numbers on their credit cards for every transaction.
This security measure significantly reduces the chances of phishing and cloning techniques implemented by hackers to steal confidential data and identity. Fraudulent entities cannot access CVV code from digital platforms either because it is not preserved.
- Dynamic CVV
Certain financial institutions offer the facility of dynamic CVV which changes after every transaction. After an online transaction is complete, the CVV code changes automatically which is notified by the issuer to the user via text message or email. With the change in CVV code periodically, individuals can avoid the risk of being targeted for frauds in case of misplacement or theft of their debit or credit cards.
Individuals thus have to choose the right credit card and debit card after analysing their security measures and fraud liability covers in case of financial frauds.
Individuals who want to experience extensive security features such as in-hand security and zero-fraud liability cover to reduce the threat of cybercrime can opt for the Bajaj Finserv RBL Bank SuperCard.
Bajaj Finserv additionally extends pre-approved offers on financial products like credit cards, business loans, personal loans, among various other products for a time-saving and hassle-free approval process. These offers help make the application process easier and less time-consuming for prospective customers. You can check your pre-approved offers just by entering basic personal details.
Credit card users wondering what is CVV should know that it increases the security factors on debit and credit cards used for online transactions. Individuals should refrain from sharing their CVV via email and social media to protect credit cards from being hacked.
