How is the Card Verification Value (CVV) calculated?

The Card Verification Value (CVV) is calculated from data encoded on the magnetic stripe of the card, utilizing a secure cryptographic process. This process ensures that the CVV is unique to each card and is designed to enhance security during card-not-present transactions, such as online purchases. The use of cryptography is essential because it protects against unauthorized access and counterfeit cards by making the CVV hard to replicate.

In this system, the CVV is derived from various pieces of data stored on the card, including the card number and expiration date, which are securely transformed using a cryptographic algorithm. This method is vital for fraud prevention, as the CVV is not stored in the same way as other card data, and thus it cannot be easily extracted from stolen information.

The other options present methods that do not align with the established processes for generating CVV codes. The first option, involving the cardholder's date of birth, bears no relation to the secure generation of CVV codes. Similarly, rotating the card number is not a recognized or secure method for calculating CVV, nor is using an algorithm that factors in transaction history relevant, as it does not pertain to how the CVV code is generated or stored on the card itself.