Risk & Compliance
AVS (Address Verification Service)
Definition
AVS (Address Verification Service) a fraud prevention tool that compares the billing address provided by the cardholder with the address on file at the issuing bank. Returns a match code indicating full match, partial match, or no match. Commonly used for CNP transactions. Not available in all countries. Should be one factor in fraud decisions, not the only one.
Related Terms
CVV (Card Verification Value)
The 3-4 digit security code printed on payment cards (back for Visa/MC, front for Amex). Used to verify the cardholder has physical possession of the card during CNP transactions. CVV cannot be stored post-authorization per PCI rules, requiring re-entry for subsequent transactions. Validation reduces fraud from stolen card numbers obtained through data breaches.
Fraud Prevention
Tools and strategies to detect and prevent fraudulent transactions before they complete. Includes AVS, CVV validation, 3DS, device fingerprinting, velocity checks, IP geolocation, and machine learning fraud scoring. Balance is critical - too aggressive blocks legitimate sales; too lenient increases fraud. Most PSPs offer built-in fraud tools; specialized providers (Signifyd, Riskified) offer guarantees.
CNP Fraud (Card Not Present)
Fraudulent transactions where the physical card is not present, typically in e-commerce. Includes stolen card credentials, account takeover, and synthetic identities. CNP fraud rates are significantly higher than card-present fraud because the merchant cannot verify physical card possession. Prevention relies on AVS, CVV, 3DS, device fingerprinting, and fraud scoring.
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