The most recent federal data placed the estimated percentage of fully banked U.S. households at 81.5% in 2021. Fully banked refers to families with at least one checking or savings account. Many also had a credit card, with about 71.5% owning at least one.
If your family is part of the banked group, you likely have at least one ATM, debit, or credit card. On the back of this card, in turn, is a 3- or 4-digit number known as a card verification value (CVV).
So, what is CVV for, and when would you ever need it?
Below, we’ll explain what you need to know about this number, so read on.
What Is Card Verification Value?
Also known as a card identification number (CID), CVV is a security feature on ATM, debit, and credit cards. Each card has at least two: CVV1 and CVV2. CVV1 is on the card’s magnetic stripe, while CVV2 is on its back.
What Do CVV1 and CVV2 Do?
CVV1 and CVV2 serve as ways to verify physical access to a card.
CVV1 verifies that a card is physically in the hands of a merchant. A merchant retrieves this security code by swiping a card on a point-of-sale (POS) device.
CVV2 is for verifying that a card owner has physical access to the card. Only the cardholder should use it; it should never get transferred during POS swipes.
Web developers also use test card numbers and codes to test their site’s payment gateways. Usually, they can get these numbers from the payment software provider or a CVV shop. The numbers do not have an existing account associated with them and are only for test purposes.
When Would You Need Your Card CVV?
You always use your card’s CVV1 for physical transactions like in-store purchases. Merchants need it to verify the card’s validity with the card issuer.
The CVV2 is for “card not present” transactions. It’s the one you must provide for remote or online card transactions.
How Can You Protect Your CVV?
By law, merchants cannot store CVV2 on transaction databases. Neither can ATMs and virtual payment gateways or terminals save them. That helps reduce the odds of fraudulent transactions.
However, you can still become a victim of fraud if someone steals or uses your lost card. After all, they already have access to your physical card, including its CVV2. That’s why you must inform your card issuer immediately after losing your card.
Your CVV2 doesn’t guarantee protection against phishing, either. This fraud induces consumers to reveal sensitive data, such as credit card info. It comes in many forms, including emails, social media messages, and phone calls.
To avoid becoming a phishing victim, don’t respond to an email or a message from an unknown sender. Always be suspicious of emails that claim you must click a link or open an attachment ASAP. If you get a call asking for your credit card info, don’t give it, especially not your CVV2.
Report those possible scams to the Federal Trade Commission (FTC) online or by phone.
Keep Your Card Verification Value Secure
Otherwise, you’d be at risk of card fraud. In 2022 alone, such crimes victimized 65% of U.S. debit and credit card holders. Together, they have cost consumers $12 billion in fraudulent charges.
So, protect yourself by never divulging your card verification value to anyone else. Always be on your toes for phishing scams as well.
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