The Address Verification Service (AVS) is a security measure to prevent fraud. While the Address Verification Service corroborates the card user’s billing address, by matching the information provided by the user itself with the information contained in the bank’s files, it only partially identifies the cardholder. The verification is usually done as part of the card authorization process and can be done either through telephone authorization for Cardholder Not Present (CNP) or through a POS-terminal. Failing to provide the correct billing address may be a reason for transaction decline. Indeed, at times legitimate transactions are declined by different reasons, e.g. the information stored in the files of the issuing bank is outdated, the address has been misspelled, etc.
Verification and Response Codes
The bankcard payment processor is the one in charge of doing the verification. Once the address check has been done, it responds to the merchant through a code. There are six codes to indicate the level in which the provided billing address matched the bank’s stored data: full match, no match, partial match-zip code, partial match-address, unavailable and international.
Despite discrepancy in the address verification process a payment transaction can still be processed, but it ends up being more expensive and could be significantly risky considering that merchants are held liable for chargebacks if they sell products to a stolen card.
No Payment Guarantee
It is important to emphasize that the Address Verification Service is merely an extra protection layer that might help to substantially reduce the amount of fraudulent transactions to be handled, but it does not guarantee payment even if an address was verified and the transaction resulted to be a deceit. AVS is offered for free but it is not available to all credit and debit cards.
At present, the use of Address Verification Service is widespread in the United Kingdom, U.S.A. and Canada and it is broadly supported by the card associations (Visa, Master Card and American Express). However, the card associations have not made it available yet for the rest of the world.
Although AVS only operates in a national level, certain banks also offer the option to verify foreign credit card accounts by doing the process manually (i.e. by phone call or fax).