Address Verification Service (AVS)

Address Verification Service (AVS) is a crucial tool used by financial institutions and merchants to validate the accuracy of billing addresses provided by customers during electronic transactions. It is a security measure designed to reduce the risk of fraudulent activities, particularly in online and card-not-present transactions. AVS compares the address information provided by the customer with the address on file with the issuing bank or credit card company to determine the level of match.

How does AVS work?

When a customer initiates a transaction, such as an online purchase or credit card payment, the billing address details are collected and transmitted to the payment processor. The payment processor then sends this information to the issuing bank or credit card company, which performs the address verification process. The AVS system compares the numeric portion of the address (e.g., house number and ZIP code) provided by the customer with the address on file. It then generates a response code indicating the level of match.

AVS Response Codes

AVS response codes are used to communicate the results of the address verification process. These codes provide merchants and financial institutions with information to assess the risk associated with a transaction. The response codes typically include a combination of letters and numbers, indicating different levels of match or mismatch between the provided address and the address on file. For example:

– “Y” or “X” indicates a full match, where both the numeric and street address match the records.
– “A” indicates a partial match, where the street address matches, but the numeric portion does not.
– “Z” indicates that the address information is not available.
– “N” or “U” indicates a mismatch, where neither the numeric nor the street address matches.

Benefits of AVS

The implementation of AVS offers several benefits to both merchants and customers. For merchants, AVS helps prevent fraudulent transactions by verifying the legitimacy of the billing address. By reducing the risk of chargebacks and unauthorized purchases, businesses can protect their financial interests and maintain customer trust. AVS also enables merchants to make informed decisions regarding the acceptance or rejection of transactions based on the response codes received.

For customers, AVS provides an additional layer of security, ensuring that their personal and financial information is protected. By confirming the accuracy of the billing address, AVS helps prevent unauthorized individuals from using stolen credit card information to make purchases.

Limitations of AVS

While AVS is an effective tool in combating fraud, it does have limitations. AVS only verifies the billing address and does not confirm the identity of the cardholder. It is possible for a fraudster to have access to the correct billing address but still use stolen credit card information. Additionally, AVS may produce false negatives or positives due to discrepancies in address formats or data entry errors.


Address Verification Service (AVS) is an essential component of the security infrastructure in the financial services industry. By verifying the accuracy of billing addresses, AVS helps protect businesses and customers from fraudulent transactions. While it has its limitations, AVS remains a valuable tool in reducing risk and maintaining the integrity of electronic transactions.