An Address Verification System (AVS) is a helpful credit card processing tool that provides merchants with an additional security measure when verifying accounts. With AVS, merchants can include the ZIP code and even the cardholder’s entire billing address in the authorization request. This is especially useful during card-not-present transactions, such as Internet sales, when merchants cannot verify accounts through signatures or other forms of identification.
How AVS Works:
AVS requests can be made simply and effectively through the normal authorization process. Once the customer places an order and the usual order information is confirmed, including price, account number and expiration date, the billing address (where the customer’s monthly statement is sent) and/or ZIP code is requested. Both the transaction information and the AVS request are processed at the same time. If the address and ZIP code do not match with those currently in the system, the appropriate steps should be taken to ensure the card is not being used fraudulently.
How it Helps:
Reduce Fraud — If a person’s credit card is stolen and used to make purchases, there is a likely chance that the person using the stolen card does not know the cardholder’s billing address or ZIP code, leading to a "No Match" result when processed through the system. AVS can also help detect when counterfeit cards are used.
Avoid Chargebacks — With an additional security measure set in place, merchants can reduce the amount of fraudulent purchases made and avoid costly chargebacks that occur when a cardholder disputes a charge.
Save Money — When financial losses due to fraud and chargebacks are decreased significantly, merchants save a significant sum of money.
By protecting customers’ credit card information through secure payment gateways and reducing costs overall with a secure Address Verification System, everybody wins.