What is Address Verification?

Address Verification is crucial in any card-not-present transaction. When you accept a card without seeing it physically, chances of accepting a fraudulent card increase significantly. As a merchant, it's essential to minimize that risk. Although there's no foolproof method, employing the AVS (Address Verification System) can substantially assist.

Each credit card is linked to the issuing bank. When you process a card, the issuing bank is immediately contacted to confirm if the card is valid. They respond with a simple yes or no. However, if you include additional information, the bank can verify that data to help confirm the customer's identity. By sending the customer's address details through a terminal or gateway, the bank can indicate if the information matches. This helps you decide whether to proceed with the sale or decline it due to a discrepancy. Most payment gateways like Allied Payments Gateway, NMI and Authorize.net allow you to set up rules that automatically flag, hold, or reject transactions based on specific AVS responses.

Besides enhancing security at the point of sale, AVS use can also lower transaction rates. Visa and Mastercard understand that using this system reduces the risk associated with a sale. They typically reward this diligence with lower interchange rates.