What is the Address Verification Service (AVS)?Want to Buy Something? Only if You Get the Address Right
What is AVS? Here’s the 411 on the One of the Most Essential Merchant Fraud Prevention Tools
We take online shopping for granted today, but selling over the internet was an unproven and risky model in the mid- to late-1990s.
An especially thorny conundrum at the time was how eCommerce buyers could prevent fraud and verify their buyers if they couldn’t see or interact with their customers in-person.
One solution? Use a knowledge factor — an authentication method that requires the user to provide information they know — to confirm that the buyer is actually the legitimate cardholder. Billing address verification is a form of this.
But why a billing address in particular? The logic is that if a bad actor stole a card, they could simply jot down the cardholder’s name, card number, expiration date, and CVV. To confirm that the buyer is actually the authorized cardholder, they would have to supply information that wasn’t printed on the face of the card.
From here, the idea is straightforward: if the buyer gets the address right, they’re likely to be the actual cardholder. As a result, the transaction goes through. But if the buyer gets the transaction wrong, they could simply be using a stolen card. Thus, the transaction is blocked.
In this article, we take a closer look at how AVS works, its history, and why it was created.
Recommended reading
- How Address Verification Works: Ins & Outs of AVS Checks
- Why AVS Checks Fail: Basic Answers for Merchants in 2026
- AVS Response Codes: Understanding Responses to AVS Checks
- A Merchant’s Guide to Integrating AVS at Checkout
- Can AVS Insulate You From Liability for Chargebacks?
- AVS Best Practices: Useful Tips for Deploying AVS
What is AVS?
- Address Verification Service
The Address Verification Service is a fraud-prevention tool that verifies the billing address given by the customer at checkout. The tool matches the address provided against the one associated with the cardholder’s account, and flags address mismatches as potential fraud.
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If you accept card-not-present transactions, including online, phone, or mail-in orders, you know that confirming the identity of the person making the purchase can be hard. The Address Verification Service was created to help solve this problem.
Mastecard launched the first Address Verification Service in the 1990s to combat the growth in fraudulent CNP transactions. At the time, the internet was in its infancy, and online sellers lacked a reliable way to verify whether their buyers were legitimate.
Specifically, how could an eCommerce merchant ascertain that the person checking out was the actual cardholder… and not a thief?
Businesses and banks reasoned that they could use the billing address provided by the buyer at checkout. Since this piece of information was not printed on the front or back of the card, it could help verify whether the shopper was genuine, and not merely a thief using a stolen credit card.
From there, the AVS was born. If the address provided matched the one on file with the issuer, then the buyer was more likely than not to be legitimate. On the other hand, a mismatch meant that the transaction was potentially unauthorized.
Where is AVS Used?
The address validation process is now widely used by other major credit card companies, too. Visa, Discover, and American Express all currently offer Address Verification Service to merchants in the US, Canada and the UK.
While AVS can help reduce the risk of fraud and chargebacks, it’s not a comprehensive solution. As fraudsters devise more and more sophisticated tactics, the address verification system may be falling behind in terms of effectiveness. That said, it’s still a very effective antifraud tool, as we’ll see later on.
