What does AVS stand for in payment processing?

AVS stands for Address Verification Service, which is a security feature used in credit card transactions to help prevent fraud. When a consumer makes a purchase, the AVS checks the billing address provided by the buyer against the address on file with the credit card issuer. This process assists merchants in verifying the identity of the cardholder, as discrepancies may indicate potential fraudulent activity.

Implementing AVS can enhance the security of electronic payments by providing an additional layer of verification. For instance, if a customer enters an address during the checkout process that does not match the one associated with their credit card, the transaction may be flagged for further review or declined, depending on the merchant's policy. This makes it a critical tool for online retailers and any businesses processing card-not-present transactions.

Understanding the significance of AVS in payment processing highlights the importance of customer data protection and the measures that can be taken to safeguard against unauthorized transactions.