Mastercard Card Validation Code (CVC2) Fee
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. As of 2018, the fee is set at $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
- Mastercard Assessment Fees
- Locating the CVC2 Fee on Your Statement
- How to Find More Competitive Processing
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.
As of 2018, the CVC2 Fee is $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. Assessment fees are set by and remitted to the credit card companies, unlike interchange, which goes to banks that issue credit cards, and markup, which 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 that are on tiered or interchange plus pricing models should be able to see if they’ve been charged the CVC2 fee by looking in the Mastercard fees section of a monthly processing statement. (Note that businesses on flat rate pricing, offered by companies like Square and Stripe, will not be able to see assessment-level fee details.)
In the samples from actual processing statements below, the CVC2 fee is clearly listed in both cases, even though in one case “Mastercard” is spelled out and in one case it’s abbreviated to “MC.”
These statements show that the two processors are passing along the CVC2 fee at cost – the rate of 0.0025 is listed clearly, as are the number of transactions to which the fee was 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 you’re being charged 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, you would not be charged the 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 for the life of your account. It’s free and no obligation, so give it a try!