Merchant Services: What Is AVS?


If you’ve read or heard anything about credit card fraud detection, you’ve probably run across the term AVS, or Address Verification System. It’s one of several security measures available through your merchant services provider that, when used together, can help keep you and your customers safe from the criminal misuse of credit cards, especially in card-not-present situations.

AVS enables merchants to verify the address of a customer using a credit card to make a purchase in one of the simplest ways possible: it checks the numeric portions of the billing address provided by the user with the address on file at the bank that issued the card.

For example, let’s say you run a business that sells merchandise on the Internet. You receive an order that, on the surface, looks legitimate but you want to make sure. By running the address through AVS, you’ll find out if it matches the billing address of the actual cardholder.

AVS checks the street number and zip code against the account file. For example, in the address 1234 Main Street, Anytown, NY 12992, AVS will run 1234 and 12992 against the record. If they check out, the merchant can move on to another anti-fraud measure like CVV (Card Verification Value), a three of four-digit number printed on the back of the card.

AVS is not a fail-safe system. False negatives have been known to occur, particularly when an apartment number is part of the address, triggering a complete or partial decline. In that case, the merchant may need to obtain a voice authorization from the issuing bank or do a manual override.

AVS has other shortcomings as well:

  • It does not apply to international purchases.
  • The system is based on information that the customer could have mistyped or otherwise entered incorrectly but not fraudulently.
  • A legitimate customer may be using a new address that they haven’t reported yet to the credit card issuer.

For these reasons, and to ensure utmost security, AVS should always be used in conjunction with CVV and other best practices to help ensure that CNP transactions are not fraudulent and to lower the risk to both merchant and cardholder.

Merchants should consult with their merchant services provider about using AVS and other security tools. TransFirst® believes in educating our clients about data breach security and PCI compliance to help make their credit card processing as secure as possible. The AVS feature is included in both our Transaction Express® electronic payment processing platform and PayFox®, our mobile credit card processing solution.


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©2017 Total System Services, Inc. TSYS® is a federally registered service mark of Total System Services, Inc. All rights reserved. TSYS Merchant Solutions is a registered ISO/MSP of Wells Fargo Bank, N.A., Walnut Creek, CA; Synovus Bank, Columbus, GA, and First National Bank of Omaha, Omaha, NE. TSYS Business Solutions is a registered ISO/MSP of Wells Fargo Bank, N.A., Walnut Creek, CA; Synovus Bank, Columbus, GA; and Deutsche Bank, New York, NY for Visa and Mastercard transactions only.

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