Which describes the effect of using a CVC/CVV during transaction processing?

Using a CVC (Card Verification Code) or CVV (Card Verification Value) during transaction processing plays a significant role in enhancing security and reducing the likelihood of fraudulent transactions. When a consumer completes a transaction, they are asked to provide this three- or four-digit code that is typically found on the back of a credit or debit card.

The presence of the CVC/CVV acts as an additional layer of authentication, as it is a code that is not stored on the magnetic strip of the card and is not easily obtainable by someone who might have stolen the card number. When merchants require this code, they can verify that the person making the transaction is indeed in possession of the physical card, therefore mitigating the risk of card-not-present fraud.

This validation step bolsters the integrity of the transaction process, leading to fewer chargebacks and enhanced trust for both merchants and consumers. Hence, by mandating the use of the CVC/CVV, merchants can efficiently protect themselves against unauthorized transactions, effectively leading to a reduction in fraud.