What is an AVS Check?
An AVS check, which stands for Address Verification System check, is a crucial security measure used in the credit card processing industry to prevent fraudulent transactions. It is a method that verifies the billing address provided by the cardholder with the address on file with the credit card issuer. This check helps businesses and financial institutions ensure that the person making the purchase is indeed the legitimate cardholder and reduces the risk of fraudulent activities. In this article, we will delve into the details of AVS checks, their importance, and how they work.
The AVS check is primarily conducted during the authorization process when a transaction is made. When a customer enters their credit card information, the merchant’s payment gateway sends the transaction details, including the billing address, to the card issuer’s system. The card issuer then compares the provided address with the one on file for the cardholder’s account. The comparison can be done in several ways, depending on the level of AVS check required by the business.
There are three levels of AVS checks: AVS Standard, AVS Extended, and AVS No-Cardholder Name. Each level provides a different level of address verification and requires different types of information from the cardholder.
1. AVS Standard: This is the most basic level of AVS check, which verifies the postal code and street address. If the information matches, the transaction is considered valid. However, if there is a mismatch, the transaction may be declined or flagged for further review.
2. AVS Extended: In addition to the postal code and street address, AVS Extended also verifies the apartment number or suite number. This level of verification is more robust and can help prevent fraudulent activities by providing more information for comparison.
3. AVS No-Cardholder Name: This level of AVS check does not require the cardholder’s name to be verified. It is typically used in situations where the cardholder’s name is not known or is not provided during the transaction.
The importance of AVS checks cannot be overstated, as they play a crucial role in preventing credit card fraud. By verifying the billing address, businesses can reduce the risk of fraudulent transactions, save money on chargebacks, and improve customer trust. Moreover, AVS checks can also help businesses comply with the Payment Card Industry Data Security Standard (PCI DSS), which mandates the implementation of security measures to protect cardholder data.
In conclusion, an AVS check is a vital tool in the fight against credit card fraud. By verifying the billing address provided by the cardholder with the address on file with the card issuer, businesses can ensure that the transaction is legitimate and reduce the risk of fraudulent activities. Implementing AVS checks not only protects the business and its customers but also helps maintain compliance with PCI DSS regulations.
