What does the Card Validation Code (CVC) do?

The Card Validation Code (CVC) plays a crucial role in enhancing the security of payment card transactions. Its primary function is to prevent unauthorized use of the card by serving as an additional layer of verification. When a customer makes a purchase, especially in card-not-present transactions (like online shopping), they are often required to provide the CVC. This code is not stored on the magnetic stripe of the card or in the card's chip, making it difficult for potential fraudsters to use stolen card information effectively.

By requiring the CVC during transactions, merchants can ensure that the person making the purchase possesses the physical card, or at least has access to the details associated with it, thereby reducing the potential for fraud. This added security measure helps to safeguard both customers and merchants against unauthorized transactions.