Address Verification Service (AVS)

Address Verification Service (AVS) is a security feature used by merchants and payment processors to help protect against fraud in card-not-present transactions. It is a tool that verifies the billing address provided by a cardholder matches the address on file with the issuing bank to confirm a cardholder's identity.

How AVS works

When a customer enters their billing address during the checkout process, the payment processor sends a request to the issuing bank to verify the address. The bank will send back a response code indicating the level of match between the address provided and the address on file.

AVS uses a combination of letters and numbers to denote the level of match. For example, if the address matches exactly, the response code would be "Y." If the zip code matches, but the street address does not match, the response code would be "Z."

Benefits of AVS

AVS can significantly reduce the risk of fraud, as a mismatch between the billing address provided and the address on file could indicate that the customer is using a stolen card or has provided false information.

By using AVS, merchants can:

  • Reduce chargeback costs
  • Increase the likelihood of successful transactions
  • Lower risk of fraud and identity theft
  • Build trust with customers

Limitations of AVS

While AVS can be an effective tool, there are some limitations to its effectiveness in preventing fraud. For example:

  • It only verifies the billing address, not the cardholder's actual identity.
  • It cannot detect fraudulent transactions where the fraudsters have access to the cardholder's billing address.
  • In some cases, legitimate transactions may be declined due to a mismatch caused by a typo or an address that has recently changed.


Address Verification Service (AVS) is a valuable security feature that helps merchants and payment processors mitigate payment fraud risk. It is not a perfect system, but when used correctly, it can be an effective tool in preventing payment fraud. By integrating AVS into their checkout process, merchants can reduce their risk of chargebacks and increase customer satisfaction.

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