Payment without CVV?

For online transactions using debit or credit cards, it is necessary to mention the Card Verification Value (CVV). But now cardholders can do transactions without it as well. In fact, Mastercard has started a new service to reduce checkout time and improve transaction convenience. Under which the debit and credit card holders using Mastercard who have tokenized their card on the merchant platform will not need CVV number for online transactions.

Mastercard claimed that Indian companies like Cash Free Payments and Zomato are already providing the facility of payment without CVV. Earlier this year, Visa card also launched a feature to allow users to make online payments without CVV number. Later RuPay also introduced CVV free payments for its debit, credit and prepaid cardholders.

What is CVV number?
CVV is a three digit number printed on the back of debit and credit cards. As per the tokenisation guidelines of the Reserve Bank of India (RBI), merchants adopting tokenized payments shall enter the CVV number only once while tokenizing the card. After this they will not need it. From the second transaction onwards, cardholders will be required to select their tokenized card from the checkout page. They have to confirm the One-Time Password (OTP). By doing this the transaction will be completed without entering the CVV.

Tokenisation system
RBI had implemented new rules for card tokenisation last year. It is a process in which the original card details are replaced with an alternate code, called a token. As per the central bank’s guidelines for tokenization and card storage, payment aggregators, merchants and payment gateways were to delete customer card data stored with them.

Card payments
Debit cards and credit cards have a significant share in merchant payments in India. According to statistics, till May 31, 2022, about 92 crore debit cards were issued. At the same time, by March 2023, more than 63% of the credit card was spent in e-commerce.