What is Address Verification System?

What does address verification system mean?

If you subscribe to a service from a link on this page, Reeves and Sons Limited may earn a commission. See our ethics statement.

A system that allows the billing address of the cardholder to be verified. By verifying the billing address, the transaction will be linked to a physical address and the chances of fraud being committed are reduced dramatically.

address verification systemWhen you shop over the Internet, for example when you reserve air tickets online, once you arrive at the billing page it will ask you to provide your billing address. If the billing address you provide does not match the one that is registered to your card then the transaction will be declined and you will be asked to resubmit your details.

The actual address verification happens by the system comparing what was entered for the billing address with the actual results on file at the issuing bank. The AVS system will return results for both the postal code and the street address.

Depending on which bank issued the credit card, an AVS can be either domestic or international. For cards issued by U.S. banks, the AVS will be domestic, and for cards issued by foreign banks the AVS will be international. Some AVS codes for Visa are actually specific to international transactions.

If you operate an ecommerce store online you should be prepared to handle both domestic and international AVS codes. Youโ€™ll quickly find that youโ€™ll receive both types of AVS codes.

There are times when youโ€™ll receive an AVS decline because the address cannot be validated, even though everything else about the authorization is valid. You can certainly capture these authorizations, but you should also consider adding a review system for these orders to double-check them and ensure that they are legitimate.

You might also find that authorizations you capture that have failed the AVS check will have higher than usual fees imposed on them by your bank. This is a usual circumstance, and you should contact your bank if you have any questions about how you can impact your discount rate through AVS management.

Rebekah Carter

Rebekah Carter is an experienced content creator, news reporter, and blogger specializing in marketing, business development, and technology. Her expertise covers everything from artificial intelligence to email marketing software and extended reality devices. When sheโ€™s not writing, Rebekah spends most of her time reading, exploring the great outdoors, and gaming.

shopify popup new
shopify light modal wide - this exclussive deal expires