It is the version number of the application on the card.
For example, the version number of the Visa VSDC application is 131, and the version number of Mastercard M/Chip Lite is 2.
It exists separately on the card and in the terminal
The Application Version Number is held both on the card and in the terminal. In EMV, the value on the card is carried in tag 9F08, and the value in the terminal in tag 9F09. The card's value shows the version of the payment application used by the issuing bank. The terminal's value shows the application version the terminal supports.
Why are the versions compared?
During the transaction, the terminal compares the two values. If the values differ, the terminal sets the “ICC and terminal have different application versions” bit in the second byte of the TVR. This on its own does not cause the transaction to be declined. The terminal evaluates this information together with the action codes defined by the bank and the terminal (IAC/TAC) to decide whether to approve the transaction, send it online or decline it.
What is it used for in practice?
Card schemes update their applications over time, adding new features and security improvements. Version information makes it possible to detect cases where an old card works with a new terminal, or a new card with an old terminal. Banks can use this information to route transactions to online approval for certain version differences. When analyzing failed transactions, which version the card and the terminal use is also among the details examined.
