The Address Verification Service (AVS) is a tool provided by credit card processors and issuing banks to merchants to detect suspicious credit card transactions and prevent credit card fraud. AVS checks the billing address provided by the card user against the cardholder's billing address registered with the issuing bank. This is done as part of the merchant's request to authorize a credit card transaction. The credit card processor sends back to the merchant a response code indicating the degree of address matching, thereby verifying ownership of the credit or debit card in a non-personal transaction. This process helps the merchant determine whether to accept or decline the card transaction.
AVS is one of the most common tools used by merchants to prevent credit card fraud. However, this is not a reliable system because the billing address provided by a bona fide customer may not always match the address registered with the card issuer. The reasons for this discrepancy may be a recent movement of the cardholder or an initially incorrect recording address. In such cases, the seller risks rejecting a perfectly legitimate transaction. AVS is an important part of the credit card authentication process and applies to US, Canadian and UK cardholder addresses.
Key Findings
• Address Verification Service (AVS) is a tool that allows merchants to detect suspicious credit card transactions and prevent credit card fraud.
• AVS checks that the billing address entered by the customer matches the address associated with the cardholder's credit card account.
• AVS response codes are returned to the merchant during the authorization process and help the merchant determine the next action, which can be transaction approval, exclusion, or rejection.
• Payment gateways should use AVS in conjunction with other fraud detection methods such as CVV verification codes, IP address verification, biometric analysis, and device authentication.
During the checkout process, the customer enters their address, which is then compared with the address specified in the issuing bank's file. After comparing the addresses, the issuing bank returns the AVS code to the seller. Merchants can use this AVS code as a guide to determine how to proceed with a transaction.
AVS response codes are single-letter codes that are returned to the merchant during the authorization process through their processing platform. These codes help determine the next action, which can be transaction approval, exception, or rejection. Typically, AVS authentication is used as part of a multi-layered anti-fraud system to ensure that valid transactions are approved and those deemed suspicious are rejected.
The payment gateway or other payment solution must use AVS in conjunction with other fraud detection mechanisms. Examples of these additional measures include CVV verification codes, IP address verification, 3D Secure, biometric analysis, and device authentication.
AVS is one of the most common tools used by merchants to prevent credit card fraud. However, this is not a reliable system because the billing address provided by a bona fide customer may not always match the address registered with the card issuer. The reasons for this discrepancy may be a recent movement of the cardholder or an initially incorrect recording address. In such cases, the seller risks rejecting a perfectly legitimate transaction. AVS is an important part of the credit card authentication process and applies to US, Canadian and UK cardholder addresses.
Key Findings
• Address Verification Service (AVS) is a tool that allows merchants to detect suspicious credit card transactions and prevent credit card fraud.
• AVS checks that the billing address entered by the customer matches the address associated with the cardholder's credit card account.
• AVS response codes are returned to the merchant during the authorization process and help the merchant determine the next action, which can be transaction approval, exclusion, or rejection.
• Payment gateways should use AVS in conjunction with other fraud detection methods such as CVV verification codes, IP address verification, biometric analysis, and device authentication.
Understanding the Address Verification Service (AVS)
The Address Verification Service (AVS) is a fraud prevention system that, when used effectively, can help limit fraud and chargebacks. AVS checks if the billing address entered by the customer matches the address associated with the cardholder's credit card account. AVS is widely used by major credit card companies to prevent card fraud (CNP).During the checkout process, the customer enters their address, which is then compared with the address specified in the issuing bank's file. After comparing the addresses, the issuing bank returns the AVS code to the seller. Merchants can use this AVS code as a guide to determine how to proceed with a transaction.
AVS response codes are single-letter codes that are returned to the merchant during the authorization process through their processing platform. These codes help determine the next action, which can be transaction approval, exception, or rejection. Typically, AVS authentication is used as part of a multi-layered anti-fraud system to ensure that valid transactions are approved and those deemed suspicious are rejected.
Address Verification Service (AVS) example
Imagine that a customer is shopping online at Amazon.com. When a customer enters their billing address during checkout, the following happens:- The Amazon payment gateway passes this address information to the customer's credit card brand (such as Visa, MasterCard, Discover, or American Express).
- The credit card brand then sends this information to the issuing bank. The issuer compares the address with the address stored in the file.
- Затем эмитент отправляет статус авторизации и соответствующий код ответа AVS на платежный шлюз Amazon.
Special Considerations
It is important to understand that AVS is not a guaranteed fraud prevention solution. In addition, in rare cases, the system may generate false or partial deviations. A partial opt-out may require the merchant to use additional verification methods before completing the transaction.The payment gateway or other payment solution must use AVS in conjunction with other fraud detection mechanisms. Examples of these additional measures include CVV verification codes, IP address verification, 3D Secure, biometric analysis, and device authentication.
