For any business that accepts credit card payments, preventing credit card fraud is a top concern. In 2025, almost 60% of US businesses reported an increase in fraud losses. If your business has spent time dealing with fraud-mitigation measures, you've probably encountered the acronym AVS. AVS stands for "address verification service". It's also referred to as "address verification system". AVS is a tool that helps businesses prevent fraud by comparing the billing address on a credit or debit card to the consumer's address.

Below, we'll explain what AVS is, how it works, and how it factors into a thoughtful fraud-prevention effort for businesses.

What's in this article?

• What is AVS?
  
• How does address verification service work?
  
• How to start using address verification service
  
• AVS codes
  
• What does "AVS rejected" mean?
  
• What is AVS mismatch?
  
• Should I use AVS for my business?
  
• How Stripe Radar can help
  

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 that they match. Businesses in the United States, Canada, and the United Kingdom use AVS to minimise fraudulent transactions and unnecessary chargebacks.

AVS can also indirectly help reduce shipping errors. AVS's focus is on verifying the customer's billing address rather than their shipping address, but if a customer enters a shipping address that matches their AVS-verified billing address, this creates an added layer of confidence that the address is real and correctly formatted. Some businesses also use the AVS response as a soft signal – if the billing address fails verification, it might prompt a manual review that catches shipping errors or suspicious orders before they are sent.

How does address verification service work?

Payment processing providers and issuers (also called issuing banks) offer AVS to businesses as a tool to reduce credit card fraud. An AVS check occurs during the card authorisation 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 contacts the bank that issued the card with a request to authorise the purchase. During authorisation, the issuer checks for the following 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 the one entered 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.

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 card validation code (CVC), postal code, and billing street address from each card transaction to the card issuer for verification.

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. AVS response codes for the four major US credit card companies can be found here.

The entire AVS process, together with other aspects of the card authentication process, usually takes only a few seconds from the moment a customer submits card and billing information for payment to the point when the business receives an authorisation or decline message.

What does "AVS rejected" mean?

"AVS rejected" means the issuer declined to authorise a transaction, usually because the address provided does not match the address the issuer has on file for the cardholder. This message can appear to businesses when they attempt to process a customer card payment, or it can appear to the cardholder when they're attempting to complete a purchase online.

When the card issuer checks the billing information provided by the business'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 that 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 authorisation that would prompt the card issuer to reject the transaction.

Should I use AVS for my business?

There are many benefits of using address verification for businesses. Along with reduced risk of fraud, AVS checks can lead to greater customer satisfaction, financial savings (since businesses often take financial losses in fraud cases), and potentially even a boost to a company's reputation. The cost of address verification services are generally already included in overall payment processing fees, so businesses usually don't need to make extra room in their budget to start using AVS.

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 for exactly this reason: AVS is a highly effective security tool in the fight against credit card fraud.

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 conducting AVS checks far outweigh the downsides for businesses and consumers.

How Stripe Radar can help

Stripe Radar helps detect fraud and unlock growth, using AI trained on data from Stripe's global network. Radar helps protect your business from fraud throughout the customer lifecycle before it affects your bottom line, while helping you approve more legitimate customers and payments.

Radar can help your business:

• Prevent fraud losses: Radar's AI learns from more than US$1.9 trillion in annual transactions across Stripe's global network, helping it identify and block fraud patterns that individual businesses may not catch on their own.

• Unify protection across evolving fraud attacks: Radar brings protection against transaction fraud, account fraud, and customer abuse all into one solution, so you gain unified protection across major fraud types.

• Adapt as fraud evolves: Radar continuously adapts to changing fraud patterns, from first-party abuse to agentic transactions, helping protect your business against emerging threats.

• Work with your existing tech stack: Use Radar with Stripe payments with no integration required, or access Radar's intelligence through programmable APIs, whether you process payments on Stripe or not.

Learn more about Stripe Radar or get started today.