Address Verification System (AVS) is an added security feature on credit cards to reduce the risk of fraud and identity theft. This feature enables merchants to check the card holder’s personal identification details against their card issuer’s records.
The Advanced Verification System (AVS) ensures that all payments that customers make through the online payment solution of credit cards are checked, reducing the risk of unauthorized use of cards. When customers make an online payment transaction for goods and services, they are prompted to enter the billing address for the card that they are using. The billing address entered is cross checked with the billing address that is registered with the card issuer.
In the case that these two addresses do not match, the online payment transaction is automatically decline. Therefore it is vital that all card holders keep their personal details up to date with their card issuer.
AVS enables merchants to conduct safe and secure payments that are authorized by the card holders. However, some merchants proceed with payments that fail the AVS but they are required to pay a higher fee for processing an unverified payment. The main reason that merchants authorize unverified payments is because they want to charge a higher processing fee to their customers.
The main advantage of using the Advanced Verification System is that it reduces the risk of fraud greatly. Additionally, as the number of fraudulent and unauthorized payments is reduced; merchants are able to decrease the amount of charge backs that their business has therefore, helping the company save money in the long term. AVS ensures that the cardholders are protected against unauthorized use of their card as well as make sure that merchants have less fraudulent payments.