What is Address Verification Service?
- aseiu law
- May 31, 2023
- 2 min read
Address Verification Service, commonly known as AVS, is a fraud prevention tool used by major credit card processors and issuing banks to authenticate ownership of a credit or debit card in a non-face-to-face transaction. It compares the billing address submitted by the buyer at checkout with the information on file at the issuing bank and reports back to the merchant with a code indicating how well the addresses match. This helps merchants decide whether to accept or decline a credit card order.
AVS checks are important for eCommerce stores because they help limit fraudulent charge-backs and other forms of fraud in the online shopping experience. It's common for buyers to mistype their billing address during the checkout process. This can be a big problem for merchants, as it could cause the transaction to be declined or result in an error message.
When an AVS check fails, it's often because of apartment numbers or non-standard address formatting. In this case, the customer may need to call their issuing bank to have their address information corrected. It can also be because the address is a PO Box, which is not valid for credit card payments.
If a business experiences frequent AVS failures, they may be charged an AVS fee by their processing company. These fees are charged for submitting AVS requests when processing transactions and are assessed on both card-present and card-not-present (CNP) sales. The AVS fee should be listed on the merchant's monthly credit card processing statement as a separate line item under "Additional Charges." The exact amount of this assessment is based on the acquirer and the card network.
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