Why Merchants Use Address Verification Services?
- bettybuchananwork
- Nov 22, 2023
- 2 min read
Address verification services are valuable tools to help ecommerce companies collect, validate, autocomplete and standardize addresses according to local postal standards. They enable fraud prevention, ensure up-to-date records, reduce return packages and improve customer experience. However, not all addresses verification APIs are created equal. It’s important to choose a provider that can support higher-level business goals like error reduction, data enrichment, and geocoding.
Card Not Present (CNP) fraud is an expensive problem for businesses, resulting in costly chargebacks and lost sales. A quality address validation solution helps prevent this type of fraud by ensuring that the billing address on a consumer’s credit card account matches the shipping address on an online order.
The Address Verification Service system is used by many credit card providers to verify whether a shipping address correlates with a consumer’s identity or matches the address on file with their bank account. After a transaction is verified, the credit card network sends an AVS response code to the merchant that indicates the degree to which the verification was successful.
Let’s take a look at a real-world scenario to understand how the AVS system works. Say Daniel is shopping at an online store and enters his street address into the AVS field on checkout. A criminal who has stolen his credit card details from the victim can then access Daniel’s online shopping history and use the credit card to make fraudulent purchases. Using AVS helps reduce fraud and other costly chargebacks for CNP merchants by ensuring that the shipping address on a consumer’s credit card correlates with the purchase made on their website.
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