What is the purpose of Cardholder Authentication Verification Value (CAVV)?

The purpose of the Cardholder Authentication Verification Value (CAVV) is to respond to a secure authentication request. CAVV is a unique code that is generated during the authentication process to help merchants and card issuers verify that the person attempting to make a transaction is indeed the legitimate cardholder. This code is critical in reducing the risk of fraudulent transactions by ensuring that the cardholder has been authenticated using a secure method, such as 3-D Secure, prior to completing the transaction.

This process adds an additional layer of security beyond traditional card information, helping to protect both merchants and consumers from potential unauthorized use of credit or debit cards. The CAVV can therefore be seen as an essential element in compliance with industry security standards designed to safeguard cardholder data and bolster trust in electronic payments.

Other options, while related to transaction security, do not accurately define the specific function of CAVV in the context of cardholder authentication. For instance, providing a transaction PIN typically refers to a different security method, and tracking card usage statistics does not relate to authentication processes. Initiating a chargeback is a separate action taken generally after a transaction dispute, not part of initial authentication procedures.