Credit Card Processing

Mastercard Card Validation Code (CVC2) Fee

by Ben Dwyer

Mastercard’s Card Validation Code 2 (CVC2) Fee is a charge that applies when you submit the CVC2 (three-digit code on the back of a customer’s card) with a transaction for authorization.

Currently, Mastercard charges $0.0025. Let’s take a closer look at the criteria for the fee and how to determine if you’ve been charged.

Card Validation Code Fee

As mentioned above, the CVC2 Fee applies when you include the customer’s 3-digit code from the back of their card with a transaction submitted for authorization. If the response to the CVC2 check is “M” for “Match” or “N” for “Invalid/Did Not Match” the fee will apply. The fee does not apply to Account Status Inquiries where the card is not actually charged.

Mastercard sets the fee at $0.0025.

Online businesses commonly request CVC2 codes when customers make a purchase, as it’s a popular anti-fraud tool that helps ensure that the customer has the physical card used for the purchase.

The Card Validation Code Fee is one of multiple Mastercard assessment fees and can be applied in addition to other processing costs.

Mastercard Assessment Fees

Assessment fees are one of three components of credit card processing, along with interchange and processor markup. Unlike interchange, assessment fees are set by and remitted to the credit card companies. Interchange goes to banks that issue credit cards. Markup goes to the processor.

Assessment fees are non-negotiable, but are often small. The CVC2 fee is less than a penny per transaction to which it applies.

However, in some cases, processors have been found to “pad” these assessment fees, charging higher costs than what the card brands set. You’ll want to ensure you’re working with a processor that passes along assessment fees to you at cost, with no additional markup. If you’re a CardFellow client, you’re already covered. Our legal agreement with processors requires that they pass assessments to you at cost, and we check to ensure that’s the case when we conduct your annual statement audits.

If you’re not a CardFellow client, you’ll need to check assessments individually if you want to know if you’re overpaying. The next section on locating the fees on your monthly processing statement provides a starting point for where to look. Keep in mind that every processing statement is a little different, and it might take some detective work to find your costs.

Locating the CVC2 Fee on Your Statement

Businesses on tiered or interchange plus pricing models should be able to see if their processor charged the CVC2 fee. You’ll need to look in the Mastercard fees section of a monthly processing statement. (Businesses on flat rate pricing will not be able to see assessment-level fee details. Companies like Square and Stripe utilize flat rate pricing.)

In the samples from actual processing statements below, the processor clearly lists the CVC2 fee in both cases. (Though in one case the processor spells out “Mastercard” and in one case the company abbreviates it to “MC.”)

CVC2 fee

These statements show that the two processors passed along the CVC2 fee at cost. The rate of 0.0025 is listed clearly, as are the number of transactions to which the fee applied, which lets you easily check the math. 19 transactions x 0.0025 =0.0475 , which rounds to $0.05, as shown in the statement. Likewise for 21 transactions x 0.0025, which comes out to 0.0525 and also rounds to $0.05.

You can check your own statement for the CVC2 Fees and do the math to determine if your processor charged you at cost.

Note that CVC2 Fees may not be on every statement. If you never request the CVC2 code and submit that code with transactions, your processor should not charge a CVC2 fee.

How to Find More Competitive Processing

Even if you’re paying assessments at cost, it’s often possible to lower your overall processing fees. Businesses that use CardFellow save an average of 40%. We help you find the most competitive processing solution and keep it, with a lifetime rate lock.  It’s free and no obligation, so give it a try!

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