Eps 1156: AVS Issue

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Tracy Bryant

Tracy Bryant

Podcast Content
Address Verification Service is a system developed by bank card processors to assist credit card and debit card holders in identifying and verifying credit card transactions. AVs can not only help verify CNP transactions online or over the phone, but also serve as fraud prevention. It is widely used by major credit card companies to stop card and non-card fraud.
AVS checks the billing address that the card user has provided to the issuing bank and compares it with the customer's credit card details. This information is transmitted to the credit card processor, which queries the AVS system to determine whether the address provided by the customer matches the billing address stored with the bank issued by the credit card.
If the issuer cannot find an exact address match, it returns an AVS code indicating how address verification failed, and this scenario essentially renders the system useless. AV s can check that the person who made the purchase knows the billing address of the card, but they cannot guarantee that they are the actual cardholder.
However, most merchants do not understand how best to use AVS to detect fraud and therefore accept these transactions. In this post I will show what AV S rejection means and why it is a bad idea to reject orders based solely on AV s information. However, AV's information is not completely irrelevant. There are a number of cases where an AvS cheque returns a full match and the trader could engage a legitimate customer, but is still refused if an order receives an AVR mismatch when it could have been placed as a legitimate customer.
Explain to your customers how important it is to use AVS and CVV to protect yourself against fraud and debit card charges and explain to them that you are using them for protection.
In some chargeback cases, the absence of an AVS check even means that the retailer loses in a dispute. If a merchant does not receive an AVS match due to a discrepancy in the verification code in a credit card transaction, this does not mean that the purchase is legitimate. Some banks that do not support AVs may receive errors from online stores due to a lack of verification. For example, if the inmatch code of a particular AV is returned, the transaction may be rejected by the credit card processor.
Merchants should know that there is a difference between an AVS mismatch code and an in-match code in a credit card transaction. As explained above, while unlawful orders may receive an AvS matchcode, legitimate orders cannot and are expected to cause problems for the merchant.
A customer with a US billing address may have a card from a foreign bank that does not support AVS, and a strict AvS check means that the order cannot be executed. While the card network and issuing banks benefit from anti-fraud measures such as AVs and CVVs, they will not authorise transactions with an AVS imbalance. However, if they do, they will approve the transaction based on the in-match code.
As mentioned above, a full AVS match is compelling information that must be provided in the dispute process, but it does not always mean that the order should be approved. An AV match does not always mean that an order should be rejected, and a Full AV match does not always mean that your order should not be accepted or approved, or vice versa.
AVS checks whether an information corresponds to the billing address that is in the card issuer's file. AVS checks whether the billing address entered by the customer is linked to the cardholder's credit card account. For more information on the difference between a Full AV Match and an AV Match, see the AV S answer at the point of sale.
If the address provided by the customer does not match the address the issuer has in the file for that customer, an AVS code will indicate a discrepancy between the two addresses and the transaction may be rejected. If the addresses match, the AV S response code will show the match and a transaction will be authorized. Since you obviously want your gateway to be able to process transactions automatically around the clock and without any input, I suggest setting up a system that automatically notifies customers by email that their transaction has been rejected due to an AVS mismatch.
Note: If you are going down this path, I recommend not to select the issuing bank that does not support AVS, but not to select it. Based on the AV S answer, you can decide whether or not to make the payment. You can either accept it, cancel it or make an exception, but if you get the message "AVS Rejected," it is a strong sign that something is wrong with your transaction.