How To Use AVS Checks to Block Payment Fraud

Address verification system technology (AVS) can help you catch fraudsters before they steal your money

By 2030, Card-Not-Present (CNP) fraud is projected to reach an unbelievable $49 billion in global losses. As payments evolve, it remains a leading concern, with criminals exploiting every vulnerability in online transaction verification.

When fraudsters need only a card number and expiry date to spend someone else’s money, you need proof that the buyer knows something only the real cardholder should: Do they have a verifiable physical address? AVS checks provide exactly that.

This verification becomes your front-line defence, stopping fraud with a smart, automated system.

What is an AVS Check?

An AVS check is a fraud prevention tool that compares the billing address entered during online transactions against the address on file with the customer’s card issuer. This verification occurs in real-time during processing, helping merchants identify potentially fraudulent card-not-present transactions.

The system operates by analysing specific address components—street number, street name, postal code and sometimes country—against the cardholder’s verified billing address held by their bank.

When address details match, the transaction receives approval signals that reduce fraud risk. You gain extra security without asking customers to do anything beyond entering their normal billing details.

As online shopping grows, so do attempts to exploit the lack of physical card verification. AVS offers a straightforward safeguard that fits naturally into your existing payment process.

How an AVS Check Works

1. Transaction initiation: Customer enters billing address during checkout, triggering automatic address verification alongside payment authorisation
2. Data transmission: Payment processor receives billing address details and forwards them to the card-issuing bank
3. Address comparison: Issuing bank compares submitted address against their cardholder records, checking street numbers, postal codes and address formats
4. Response generation: Bank returns specific codes indicating exact match, partial match or no match
5. Merchant decision: Payment systems approve, decline or flag transactions for manual review based on predetermined rules

The entire verification process completes within seconds during the payment authorisation.

Key AVS Response Codes

Understanding response codes helps you make informed approval decisions and optimise fraud prevention strategies:

• Full match (Y): Complete address and postal code match, indicating lowest fraud risk and highest approval confidence
• Address match only (A): Street address matches but postal code doesn’t, requiring additional verification or manual review
• Postal code match only (Z): Postal code matches but street address differs, common with international formatting variations
• No match (N): Neither address nor postal code match, indicating highest fraud risk and typically triggering automatic decline
• Unavailable (U): Issuing bank cannot verify address, often occurring with international cards or newer accounts
• Service not supported (S): Card issuer doesn’t participate in AVS, requiring alternative fraud prevention methods

Response patterns reveal important fraud intelligence. Multiple “no match” attempts from the same customer might indicate fraudulent testing. Likewise, “address match only” could suggest legitimate customers entering addresses differently than bank records show.

You control how to handle each code. Many businesses automatically approve full matches, manually review partial results and decline complete mismatches. Adjust your rules based on your risk tolerance and market mix to balance security with sales.

Benefits of Using AVS

Implementing address verification delivers measurable improvements across payment security and operational efficiency:

• Fraud reduction: Catches card-not-present fraud before transaction completion, reducing chargeback costs and revenue losses
• Automated screening: Eliminates manual address verification work, allowing payment teams to focus on complex fraud patterns
• Chargeback prevention: Provides evidence for chargeback disputes, demonstrating due diligence in fraud prevention efforts
• International compliance: Meets card network requirements for address verification, maintaining good standing with Visa and Mastercard
• Customer confidence: Visible security measures increase customer trust during checkout, particularly for high-value purchases
• Risk assessment: Creates fraud scoring data that improves overall payment security strategies and approval rate optimisation

Address verification works particularly well when combined with other fraud prevention tools, creating multiple verification layers that catch different fraud patterns. For expensive items or high-fraud markets, these advantages directly translate to fewer losses.

Best Practices for Advanced Fraud Prevention Beyond Basic Address Verification

Automate Multi-Layer Verification Workflows

Manual reviews become bottlenecks. When staff handle AVS mismatches, CVV (Card Verification Value) failures and suspicious device signals separately, decisions vary between teams, shifts and regions. This inconsistency creates weak spots for fraudsters to target.

Some payment platforms combine AVS, CVV and behavioural data for unified risk scoring, though this integration isn’t always straightforward.

These smart tools let you create “if AVS A or Z then request CVV; if AVS N then decline” logic without coding. Standardising these decisions lets you apply consistent safeguards worldwide and save human review for unusual cases.

This approach also reduces fraud while freeing your analysts to focus on complex attacks rather than checking address typos.

Integrate Real-Time Risk Scoring Engines

Fixed rules catch yesterday’s fraud tactics but miss coordinated card-testing or new fraud strategies..Address verification works best when integrated into dynamic scoring as a tool for fraud detection rather than used as a simple yes/no filter. Consider the revenue lost when good customers fail AVS because they’re using a work address. Strict rules reject them outright.

Smart models lower thresholds for returning customers with strong histories while tightening requirements for first-time buyers in high-risk locations. Work with providers whose models improve automatically by scoring risk in real time.

Customise Verification Rules by Geographic Market

Address formats differ dramatically between different regions. One-size-fits-all AVS rules ignore these differences and create false declines. AVS support itself varies widely—strong in the UK, spotty across much of Asia and Latin America.

Start by segmenting your traffic. Where banks return reliable AVS codes, you can set stricter policies. Decline full mismatches and verify partial ones. In regions that mostly return “U” (unavailable), relax AVS requirements and add other checks. Document verification or location checks work well.

Monitor Performance Analytics Continuously

You can’t fix what you don’t measure. Many teams export AVS response logs but never analyse how those codes affect approvals, fraud losses and customer abandonment. Blind spots grow when outdated rules remain unchanged.

Real-time analytics reveal trends as they emerge, enabling timely rule adjustments.

Manage Customer Experience During Verification

Security that drives away customers defeats its purpose. Address mismatches often happen for innocent reasons like: recent moves, address abbreviations and apartment numbers. Without clear guidance, frustrated shoppers abandon carts.

Clear messaging reduces frustration. Tell customers when an address check fails and guide them on proper formatting. For international shoppers, accept local address structures and use alternative verification when AVS isn’t reliable. Request CVV or trigger 3-D Secure.

Monitor abandonment rates related to verification steps. If conversions drop after introducing stricter AVS rules, test progressive challenges that escalate only when multiple risk signals appear.

Fine-tuning your communication and backup verification also preserves security while keeping checkout smooth enough to convert legitimate customers.

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