9-3 Address Verification Service or System (AVS)

Address Verification Service or System (AVS)

Address Verification Service (AVS) is a system that helps to combat credit card fraud by comparing the billing address of a credit card that is on file at the issuing bank, with the billing address that the customer provides when they make a purchase. Manual entry of address verification information is not required for retail merchants that transact credit cards by swiping them through a credit card machine, but it is required by VISA for all merchants that process credit cards when the customer or the card is not present, such as online or mail order businesses.

If a card not present business fails to use AVS when running VISA credit card transactions, the transactions will automatically be downgraded to the non-qualified (highest) rate. Transactions will still be processed, and the funds will still be deposited, but all transactions will be penalized. Many card not present businesses are unaware of this regulation, and have no idea that they are paying a considerably larger discount percentage when they run VISA transactions because they are not using AVS.

Different types of credit card processing equipment will handle AVS differently, but every card not present business should make sure that AVS is built in to their equipment's programming. If you are not sure if your equipment is performing address verification, we strongly recommended that you contact your merchant service provider to verify that it is in fact being used.

AVS operates by comparing the billing address on file at the issuing bank with the address that the customer provides when they place an order. Your processing equipment will let you know if the two addresses match by displaying a "Y" if the addresses match, or a "N" if they do not. Credit card terminals will print the "Y" or "N" directly on the credit card receipt, and gateways and credit card processing software applications will display it on screen.

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