For any business that accepts credit card payments, preventing credit card fraud is always a top concern. During 2021, US retailers experienced an average of 1,740 fraud attempts each month—and over half of these attempts were successful, making 2021 the first year on record in which successful fraud attempts outnumbered failed attempts. If your business has spent time dealing with fraud-mitigation measures, you’ve probably encountered the acronym AVS. Whether or not you already know what AVS means, it’s a good idea to get a deeper understanding of what AVS is, how it works, and how it factors into a thoughtful fraud-prevention effort for businesses.
Here’s everything businesses need to know about AVS, one of the most basic and effective tools to reducing credit card fraud.
What’s in this article?
- What does AVS stand for?
- What is AVS?
- How does address verification service work?
- AVS codes
- What does “AVS rejected” mean?
- What is AVS mismatch?
- Should I use AVS for my business?
- How to start using address verification service
What does AVS stand for?
AVS stands for “address verification service.” It’s sometimes also referred to as “address verification system.”
What is AVS?
AVS is an identity verification tool that allows businesses to detect and prevent potentially fraudulent credit or debit card transactions by comparing the billing address provided by a customer with the billing address on file for the card, to confirm they match. Businesses in the United States, Canada, and the United Kingdom use AVS to minimize fraudulent transactions and unnecessary chargebacks.
How does address verification service work?
Payment processing providers and issuers (also called issuing banks) offer AVS to businesses as a tool to cut down on credit card fraud. AVS occurs during the card authorization portion of a customer transaction. When a customer submits a card for payment during checkout, they provide a billing address. Upon accepting payment information, the business’s payment processor reaches out to the bank that issued the card with a request to authorize the purchase. During authorization, the issuer checks for a few things:
- The account has adequate funds or credit available to cover the amount requested in the transaction.
- The card is currently valid.
- The card verification value (CVV) code matches that input during the transaction. (This is the three- or four-digit code usually located on the back of the card next to the signature line.)
- The billing address provided during checkout matches the address on file for the card. (This is the “address verification” component of the AVS authentication process.)
AVS is typically used to authenticate a cardholder’s identity for card-not-present (CNP) transactions, like online purchases.
AVS codes
After locating the address on file for the card, the issuer will return a single-letter code, called an AVS response code, to the business via their payment processor. These codes, which vary from network to network, tell the business what next steps they should take with the transaction. Here are the possible AVS response codes for the four major US credit card companies.
|
Code
|
Visa
|
Mastercard
|
Discover
|
American Express
|
|---|---|---|---|---|
|
A
|
Street address matches, ZIP does not | Street address matches, ZIP does not | Street address matches, ZIP does not | Street address matches, ZIP does not |
|
B
|
Street address matches, but ZIP not verified | Not applicable | Not applicable | Not applicable |
|
C
|
Street address and ZIP not verified | Not applicable | Not applicable | Not applicable |
|
D
|
Street address and ZIP match (international only) | Not applicable | Not applicable | Not applicable |
|
E
|
AVS data is invalid or AVS is not allowed for this card type | Not applicable | Not applicable | Not applicable |
|
F
|
Street address and postal code match (UK only) | Not applicable | Not applicable | Street address matches, card member name does not match |
|
G
|
Non-USissuing bank does not support AVS | Not applicable | Not applicable | Not applicable |
|
I
|
Address information not verified for international transaction | Not applicable | Not applicable | Not applicable |
|
K
|
Not applicable | Not applicable | Not applicable | Card member name matches |
|
L
|
Not applicable | Not applicable | Not applicable | Card member name and ZIP match |
|
M
|
Street address and postal code match (international only) | Not applicable | Not applicable | Card member name, street address, and ZIP code match |
|
N
|
Street address and ZIP code do not match | Street address and ZIP code do not match | Street address and ZIP code do not match | Street address and ZIP code do not match |
|
O
|
Not applicable | Not applicable | Not applicable | Card member name and street address match |
|
P
|
ZIP code matches, street address unverifiable due to incompatible formats (international only) | Not applicable | Not applicable | Not applicable |
|
R
|
System unavailable, retry | System unavailable, retry | System unavailable, retry | System unavailable, retry |
|
S
|
AVS not supported | AVS not supported | AVS not supported | AVS not supported |
|
T
|
Not applicable | Not applicable | 9-digit ZIP matches, street address does not | Not applicable |
|
U
|
Address information unavailable Returned if the US bank does not support non-US AVS or if the AVS in a US bank is not functioning properly | Address information unavailable | Address information unavailable | Address information unavailable |
|
W
|
9-digit ZIP matches, street address does not | 9-digit ZIP matches, street address does not | 9-digit ZIP matches, street address does not | Card member name, ZIP, and street address do NOT match |
|
X
|
9-digit ZIP and street address match | 9-digit ZIP and street address match | 9-digit ZIP and street address match | Not applicable |
|
Y
|
5-digit ZIP and street address match | 5-digit ZIP and street address match | 5-digit ZIP and street address match | 5-digit ZIP and street address match |
|
Z
|
5-digit ZIP matches, street address does not | 5-digit ZIP matches, street address does not | 5-digit ZIP matches, street address does not | 5-digit ZIP matches, street address does not |
The entire AVS process, in tandem with other aspects of the card authentication process, usually takes no more than a few seconds from start to finish, from the moment a customer submits card and billing information for payment to the point when the business receives an authorization or decline message.
What does “AVS rejected” mean?
“AVS rejected” is a message that can show up for businesses when they attempt to process a customer card payment, or it can potentially show up for the cardholder when they’re attempting to complete a purchase online. This message means the issuer declined to authorize a card transaction, usually because the address provided does not match the address the issuer has on file for the cardholder. When the card issuer checks the billing information provided by the busines’s payment processor against the cardholder information they have on file and finds a discrepancy between the two, they will return one of the above codes indicating that the transaction is rejected.
What is AVS mismatch?
In AVS, a mismatch occurs when the address information presented at checkout with a credit or debit card purchase doesn’t match the address the issuer has on file for that card. When this mismatch occurs, typically the transaction will be declined. The term “AVS mismatch” is a description of what happens during authorization that would prompt the card issuer to reject the transaction.
Should I use AVS for my business?
AVS is one of the leading measures businesses take to prevent credit card fraud and the many negative impacts fraud can have on their business and customers. Most payment processors and card issuers require AVS for card transactions. The reason is simple: AVS is a highly effective security tool in the fight against credit card fraud.
Despite the important benefits of AVS, it’s important to note that AVS isn’t a perfect system. It’s possible that a customer could provide billing information that doesn’t match what their card issuer has on file, even though they are the legitimate cardholder. This can happen when the cardholder moves to another address and doesn’t update their billing address with their card issuer, or if the issuer made a mistake when first entering the address on file. Even with these drawbacks, the benefits of AVS far outweigh the downsides for businesses and consumers.
How to start using address verification service
Businesses that use Stripe for payment processing support don’t need to take any additional steps to begin using AVS. Stripe uses AVS by submitting the CVC, postal code, and billing street address from each card transaction to the card issuer for verification.
The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accurateness, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent attorney or accountant licensed to practice in your jurisdiction for advice on your particular situation.