3 or 4 Digit Code
Also known as the Cardholder Verification Value or Card Identification, these three or four numbers help ensure that the physical card is in the cardholder’s possession while shopping online or by phone, helping to prevent unauthorized or fraudulent use. (VISA refers to the code as CVV2, MasterCard calls it CVC2, and American Express calls it CID.)
Where can I find it?
The 3-digit code is located on the back of your card, inside the signature area. Typically the signature panel will have a series of numbers, but only the last three digits make up the CVV2 code. American Express has a 4-digit number on the front of their card
What does it do?
It’s actually more about what it prevents. When shopping
online or over the phone, the 3-digit code helps merchants
ensure that the card is in the right hands. Merchants will
request the CVV2 at checkout from the cardholder, and the
information is sent electronically to the card-issuing bank
to verify its validity. Within seconds the CVV2 results are
returned with authorization. If it’s returned invalid,
merchants have the right to stop the transaction.
And for your added protection, merchants are prohibited from
keeping or storing the CVV2 number after the transaction has
been completed.