debit-card

What is a debit card security code and how does it work?

Your debit card security code offers another line of defence against unauthorised access to your banking account.

Your debit card provides a direct link to your banking account, which means your savings could be completely wiped out if it ends up in the wrong hands. To minimise that risk, especially with online or over-the-phone purchases, most debit cards come equipped with a special security code that ensures the person providing the debit card details in a transaction has it in their possession.

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    What is a debit card security code?

    Most banks now provide account holders with a debit card that contains a special three-digit or four-digit numeric code embedded on it, similar to the codes on a credit card. This numeric code is separate to the debit card number and verifies the cardholder. This is especially important for when you are making online or over-the-phone purchases, where you cannot provide a signature as proof of your authorisation to use the card.

    Case study: How does security code work?

    online-shoppingAmanda is shopping for a pair of sneakers for her son and finds the pair of Nikes he wants on sale at an online sporting goods store. Since there are no retailers close to her house and the retailer is able to deliver within seven days, she decides to make the purchase online using her debit card.

    She proceeds to checkout where she is prompted to enter her personal information followed by her debit card number and expiration date. The last field asks for the security code, which she finds on the back of her card in small print. Once entered, the transaction is processed and the new pair of tennis shoes is on their way to Amanda’s house.

    Where is the code located?

    The debit card security code can be found on the back of the card in the bottom-right corner of the signature panel. Instead of being embossed like your card number, it’s printed in small black letters. This security code is typically three or four numbers long and completely different from the series of numbers embossed on the front.

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    What are the security benefits?

    It is a requirement by the issuer of debit cards with security codes and the Payment Card Industry Data Security Standard that the code not be stored in any database once the transaction has been authorised. This measure ensures that the card numbers will not be useful if the merchant’s payment records are hacked. The security code is not included in the information that can be found on the magnetic strip, therefore making it virtually impossible for an individual who has obtained the card number and expiration date to use that information to conduct a transaction online or over the phone.

    Are there any limitations?

    Although merchants are not permitted to store the debit card security code, they are not required to ask for it when making a transaction. This could allow for fraudulent activity from individuals who have obtained only the information found on the front of the debit card. Phishing scams, where you are tricked into giving out your debit card information on a false website, steal that information and then could use it with those merchants who do not ask for the security code at checkout.

    The other drawback with the debit card security code is that it limits you when setting up periodic payments as that code is not stored along with your card number. However, since you’re setting up payments to be directly drawn from your linked bank account, you should be able to provide the account number rather than the debit card information so that direct debits can be made on an ongoing basis.

    Compare debit cards below

    Rates last updated August 23rd, 2017
    $
    Monthly Account Fee Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Details
    NAB Classic Banking
    $0 monthly account fees.
    Tap and pay with your NAB Visa Debit card, NAB Pay for Android or NAB PayTag for iPhone.
    Visa $0 $0 $0 account keeping fees with no deposit conditions. Unlimited free withdrawals at NAB and rediATMs. Go to site More
    ING Orange Everyday Account
    $75 cash bonus & Apple Pay available.
    Get a competitive ongoing variable rate when linked with an ING Savings Maximiser.
    Visa $0 $1,000 $0 monthly account keeping fees. Unlimited free withdrawals at any ATM in Australia if you deposit $1,000 each month. Go to site More
    ANZ Access Advantage
    Apple Pay, Android Pay & ANZ Mobile Pay.
    Take advantage of Apple Pay by linking your ANZ Visa Debit card to an eligible iPhone and seamlessly pay for purchases with your phone.
    Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at ANZ ATMs. Go to site More
    Bankwest Qantas Transaction Account
    Earn Qantas Points on eligible purchases and on your account balance.
    Conditions apply.
    Mastercard $0 $2,000 $0 account keeping fees when you deposit at least $2,000 into your account each month. Otherwise, a $6 monthly fee applies. Unlimited Free withdrawals at Bankwest and CommBank ATMs in Australia. Go to site More
    Westpac Choice
    $0 ATM withdrawal fee at 50,000+ ATMs globally.
    Via Westpac's Global ATM Alliance. Get Cash without your debit card (conditions apply).
    Mastercard $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at St.George, Westpac, Bank of Melbourne and BankSA ATMs. Go to site More
    BankSA Complete Freedom Account
    Cardless Cash available. Open one in less than 3 minutes.
    Visa $0 $0 $0 account keeping fees if you deposit at least $0 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at BankSA, St.George, Westpac and Bank of Melbourne ATMs. Go to site More
    Bank of Melbourne Complete Freedom
    Get Cardless cash and shop securely with your Visa debit card. Customise SMS and email alerts.
    Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at Bank of Melbourne, St.George, Westpac and BankSA ATMs. Go to site More
    St.George Complete Freedom Account
    10% Cash back for online gaming purchases and $50 cash bonus offer.
    Waived account keeping fees when minimum deposit is met with no minimum balance.
    Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 fee applies. Unlimited free withdrawals at St.George, Westpac and BankSA ATMs. Go to site More
    Bankwest Easy Transaction Account
    Get up to $50 cash back per month for new customers (conditions apply).
    Click on "More" to see full conditions.
    Mastercard $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $6 monthly fee applies. Unlimited free withdrawals at CommBank, NAB, ANZ, Westpac, St.George, Bank of Melbourne and BankSA ATMs. Go to site More

    Frequently asked questions

    No. Since the security code is not embossed on the card the way the account number is, that information is not seen when a merchant makes a physical copy of your debit card.

    Along with most of your debit card account details, that information is encrypted so that only the issuer is able to see the code when authorising the transaction.

    No. Your signature is all that is needed for EFTPOS transactions. If you see a store clerk recording the security code, you should report it to your bank.

    Shirley Liu

    Shirley is finder.com.au's publisher for banking and investments. She has completed a Masters in Commerce (Finance) and is the author of hundreds of articles. She is passionate about helping Aussies make an informed decision, save money and find the best deal for their needs.

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