CVV2 Does Not Affect Credit Card Rate Qualification

Most merchants mistakenly believe that processing a cardholder's three or four digit value (CVV2, CVC2 or CID) for a card-not-present transaction (e.g. ecommerce) will help qualify for lower credit card rates. The CVV2 value is only valuable to protect against credit card fraud and has nothing to do with rate qualification. These three and four digit codes aremost often confused with Address Verification Service (AVS) which can be used to qualify for lower credit card rates.

CVV stands for Card Verification Value and was introduced by MasterCard in 1997 and Visa in 2001. For swiped transactions, the value is referred to as CVV1. Each of the card brands has its own acronym:

  • Visa: CVV2 - Card Verification Value
  • MasterCard: CVC2 - Card Validation Code
  • American Express: CID - Unique Card Code (and 4 digits)
  • Discover: CID - Card Identification Number

Merchants are able to configure payment processing systems to accept or decline transaction requests based upon the match or mismatch of CVV2, CVC2 orCIDinformation. So for example, if a merchant creates a rule to decline all transactions where the CVV2, CVC2 orCIDvalue does not match, the authorization request could be successful with the issuing bank, but the transaction will be denied by the merchant. Even though the transaction was denied by the merchant, the consumer's card will still be authorized.

PCI DSS Compliance prohibits merchants from storing the CVV2, CVC2 or CID values. For recurring billing, merchants can accept and validate the code during the initial authorization but cannot store it for additional transactions. After the initial validation, there really is no value in storing it.

Other Related Blog Posts
PCI Prohibits the Storage of CVV2 Data
PCI DSS Compliance Basics
Where do Credit Card Fees Come From?

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