Merchant Account Address Verification System (AVS) Explained

Here is the illustration depicting the Address Verification System used in e-commerce.

What is an Address Verification System (AVS)?

An Address Verification System (AVS) verifies that the billing address of the credit or debit card matches the address that was given by the customer. The Address Verification System (AVS) used in merchant accounts is a tool to help prevent fraudulent transactions when a credit or debit card is not physically present during a purchase, like in online shopping.

How an Address Verification System Works

The Address Verification System (AVS) operates by comparing the billing address provided by a customer during a transaction to the address on file with the credit card issuer. When a merchant receives a credit card payment, they submit the card number along with the customer’s billing address to their payment processor, who forwards this information to the card issuer for verification. The issuer then checks the submitted address against their records and returns a response code indicating a full match, partial match, or no match. Based on these codes, the merchant decides whether to approve the transaction, request additional verification, or decline the purchase.

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