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What is the CVV code?

The CVV code is known as the Card Verification Value (CVV) and is a security feature for credit or debit card transactions, giving increased protection against credit card fraud.
The CVV is a 3- or 4-digit value printed on the card or signature strip, but not encoded on the magnetic stripe. MasterCard, Visa, Diners Club, Discover, and JCB credit and debit cards have a 3-digit code, called the "CVC" (card validation code), "CVV" (card verification value), "CVV", and "CID" (card identification number), respectively. It is not embossed like the card number, and is always the final group of numbers printed on the back signature panel of the card.
New North American MasterCard and Visa cards feature the "CVC2" in a separate panel to the right of the signature strip. This has been done to prevent overwriting of the numbers by signing the card. American Express cards have a 4-digit code printed on the front side of the card above the number, referred to as the CID (or Unique Card Code). It is printed flat, not embossed like the card number.
Supplying the CVV code in a transaction is intended to verify that the customer has the card in their possession. Knowledge of the code proves that the customer has seen the card, or has seen a record made by somebody who saw the card. To date, no cracks for this system are known. Reference: http://en.wikipedia.org/wiki/Card_Security_Code

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