What Is the Security Code on a Credit Card?

A credit card security code serves as a safeguard in the modern payment ecosystem. This code helps protect transactions by providing an additional layer of verification. Its primary purpose is to confirm that the individual making a purchase has legitimate possession of the physical card. This measure reduces the risk of fraudulent activity, particularly in situations where the cardholder is not physically present.

Defining and Locating the Security Code

A credit card security code is a three or four-digit number that is not embossed like the primary account number. This design prevents the number from being easily replicated. Its non-embossed nature means it is not part of the magnetic stripe or chip data, enhancing its security.

For most major card networks, including Visa, Mastercard, and Discover, the security code is a three-digit number located on the back of the card. It is found within or near the signature strip, appearing after the last four digits of the primary account number. American Express cards feature a four-digit security code positioned on the front of the card. This code is printed above the primary account number, on the right side.

The Role of Security Codes in Transaction Security

Security codes play a role in securing “card-not-present” (CNP) transactions, which include purchases made online, over the phone, or via mail order. When a consumer provides their card details for a CNP transaction, the security code acts as an immediate verification that the individual possesses the physical card. Without this code, a transaction is declined, even if the primary card number and expiration date are known. This mechanism deters fraudsters who might obtain card numbers through data breaches but lack access to the physical card.

Payment card industry standards, such as those outlined by the Payment Card Industry Data Security Standard (PCI DSS), prohibit merchants from storing the security code after a transaction has been authorized. This regulation reduces the risk of the code being compromised if a merchant’s database is breached. By not retaining this information, the security code remains effective as a one-time verification tool for each transaction. This policy ensures that even if card numbers are stolen, the associated security codes are not available for fraudulent activity.

The effectiveness of the security code relies on its secrecy and the inability of merchants to store it. This design makes the code a security element, requiring the physical card for each new transaction. Its presence helps establish that the person initiating the payment is the legitimate cardholder, protecting both consumers and businesses from financial losses due to unauthorized use. This continuous verification process helps maintain trust within digital payments.

Variations in Security Code Terminology

While serving the same purpose, security codes are referred to by different names across various card networks. Visa refers to its security code as the Card Verification Value 2, abbreviated as CVV2. This helps distinguish it from older verification methods.

Mastercard uses the term Card Validation Code 2, or CVC2, for its security code. Similar to Visa’s, this code validates card-not-present transactions. American Express and Discover both use the term Card Identification Number, abbreviated as CID, for their security codes.

Despite these different names—CVV2, CVC2, and CID—all these codes serve the same function of verifying cardholder possession during transactions where the physical card is not swiped or inserted. The general term Card Security Code, or CSC, is used to encompass all these variations. Regardless of the terminology, the goal is to enhance transaction security by confirming physical possession of the card.