The card security codes are three or four digit numbers (depending on card brand) that are printed on the card. By confirming the codes, you confirm that the person making the card not pressent transaction most likely has the actual card in their possession. No single anti-fraud measure protects merchants completely but this is one piece of a recommended anti-fraud plan.
CVV2/CVC2 is a three-digit number imprinted on the signature panel of Visa or MasterCard cards to help card-not-present merchants verify that the customer has a legitimate card in hand at the time of the order. The merchant asks the customer for the code and then sends it to the card issuer as part of the authorization request. The card Issuer checks the code to determine its validity, then sends a result back to the merchant along with the authorization. CVV2 is required on all Visa cards.To protect CVV2 data from being compromised, Visa U.S.A. Inc. Operating Regulations prohibit merchants from keeping or storing CVV2 numbers once a transaction has been completed.
CID stands for Card Identification Digits. This is used to validate that an American Express card is in the consumer's possession for a card not present transaction.