Using AVS to Reduce Processing Costs

Merchant services refer to a range of financial services provided to businesses to facilitate electronic payment processing. These services are typically offered by banks, payment processors, or specialized merchant service providers. The primary goal of merchant services is to enable businesses to accept and process various forms of electronic payments, including credit and debit cards, online transactions, and mobile payments.

One essential aspect of merchant services is Address Verification Service (AVS). AVS is a security feature used to validate the billing address provided by a customer during a card-not-present transaction, such as online or over-the-phone purchases. It helps verify that the address entered by the customer matches the billing address associated with the credit or debit card being used for the transaction.

AVS works by comparing the numerical portion of the customer's billing address (street number and ZIP code) with the information on file with the card issuer. The AVS system then provides a response code indicating the level of match between the entered address and the card issuer's records. The response codes can be used by the merchant to determine whether to proceed with the transaction or take additional security measures.

The AVS response codes typically include:

• Match: Both the numerical portion of the address and the ZIP code match the card issuer's records.

• Partial Match: Either the numerical portion of the address or the ZIP code matches the card issuer's records.

• No Match: Neither the numerical portion of the address nor the ZIP code matches the card issuer's records.

Merchants can use AVS as a fraud prevention tool. If an AVS response code indicates a mismatch, the merchant can request additional verification from the customer or decline the transaction altogether. AVS helps minimize the risk of fraudulent transactions by adding an extra layer of authentication.

In conclusion, merchant services encompass the range of financial services that enable businesses to accept electronic payments. AVS is an important component of these services, providing a mechanism to verify the billing address provided by customers during card-not-present transactions, thereby enhancing security and reducing the risk of fraud. Reducing the risk of fraud, in turn, reduces processing costs.

If you have any questions regarding how you can leverage AVS, simply send us a message and we will be happy to provide you an analysis for your business.