What does the Address Verification Service (AVS) fee cover?

The Address Verification Service (AVS) fee covers the verification of the address provided by cardholders. This service is crucial for reducing the risk of fraudulent transactions, as it allows merchants to confirm that the billing address given by the customer matches the address on file with the card-issuing bank. By using AVS, merchants can enhance the security of their transactions, ultimately helping to prevent chargebacks and reduce losses due to fraud.

Understanding this service is essential for professionals in the payments industry, as authentication methods like AVS play a significant role in maintaining the integrity and security of payment processing. The other options refer to different aspects of payment processing but do not directly pertain to the specific function that the AVS fee addresses.