Why are security codes like the CVV important for online transactions?

Security codes like the CVV (Card Verification Value) are crucial for online transactions because they verify the legitimacy of the transaction. When a consumer enters their card details for an online purchase, the CVV acts as an added layer of security that helps ensure that the person making the transaction actually possesses the physical card. This is especially important in online environments where the card is not physically present, making it easier for fraudsters to make unauthorized transactions using stolen card numbers.

The CVV helps protect both the cardholder and the merchant by reducing the risk of chargebacks and fraudulent activities. As a result, merchants often require this information during the checkout process to confirm the identity of the purchaser, which assures them the transaction is legitimate.