Credit cards are an indispensable part of modern life. They are the go-to mechanism for all payments and have almost entirely replaced cash-based transactions in many parts of the world. They are especially useful when making online purchases, which only process orders once paid for.
As expected, where there is money involved, theft of some form will be present alongside. With the growing reliance on online payments, credit cards have become a hot target for online fraudsters. Measures to mitigate such crimes have also grown, with options like CVV or Card Verification Value.
How Does It Improve Security?
The Card Verification Value goes by many names. It is a three or four-digit number printed on either the front or back of the card. It is also embedded in the magnetic strip at the back. It joins the list of other security-related details on the card to enhance security in several ways.
Online transactions require the various card-related details to be entered in the respective sections of the payment page. This includes the Card Verification Value number. Only when all the details entered are found to match with one another does the transaction proceed. It means that without this number, the fraudulent user will not be able to conduct theft. This is called a CVV filter and is present on all online transaction websites.
Nowadays, a dynamic value is used, which changes every time it is used. CVVs are permanent, meaning they can still be misused once a criminal knows them. Dynamic Card Verification Value or One-Time-Passcode is sent to the user’s phone or email just before completing the transaction. It can be used once only and within a limited time frame. This reduces the risk of fraud significantly.
Classified Algorithm Based Encrypted Generation
The CVV is not a random number and is purposefully generated using a combination of detailed data and secretive algorithms. The data used is the customer’s primary account number, a couple of Digital Encryption Standard keys, four-digit expiration date, and three-digit service code.
This means that Card Verification Value can’t be guessed and created by the criminal in case of possession of other sensitive information, adding to the security further.
Since the CVV is embedded into the magnetic strip at the back of the card during its creation, it serves as a beneficial security measure. Whether the card is used in brick-and-mortar stores where it is swiped on the point of Service (POS) machine, or any other establishment, it keeps your accounts safe. The machine contains a magnetic reader that scans the strip for information and relays it to the detail collection algorithm.
Thus the full security feature is provided when purchasing from that merchant without manually entering it into the machine alongside the PIN. This again stops others from snooping in on it while typing, quickens the entry process, and reduced information theft chances.
Care must be taken to place the card in an RF shielded case as otherwise, the strip can be read by criminals using scanning devices.
Security Standard-Based Protection
Card companies like Visa established the Payments Card Industry (PCI) Security Standards Council in 2004 and created the Data Security Standard for all transactions. One of its features is the non-inclusion of Card Verification Value in the main database of card related information. Due to this, even in the event of a data breach in the merchant or bank’s end, the number will not fall into the criminals’ hands.
These standards are continuously improved, meaning the security only gets better with time.
The world of credit card based payments is a minefield that must be tread carefully to stay safe. Safeguards like CVV go a long way towards helping users take the right step and avoid the dangers present.