Why Address Verification Vital for the E-Commerce Industry?

Address Verification Service is one-stop resource for gathering the background info you need to design, manage, market and expand your e-store

The Address Verification Service is offered to retailers by credit card processors and issuing banks for identifying suspicious transactions and preventing fraud. Using the AVS, the verifying address submitted by the cardholder is contrasted with the address kept on file by the issuing bank.

This process is carried out by online merchants as part of their request for credit card transaction authorization. In order to verify the owner of a card in a remote transaction, the credit card processor provides a response number back to the e-retailer that indicates the degree of address verification. By 2023, there will be 519.4 million customers participating in the e-commerce business. This procedure helps e-stores  in determining whether to accepted or decline a card transaction with AVS.

Also read: AML verification

Discernment of  the Verify Address in E-Commerce Industry

For AVS to work effectively, the billing address provided by the customer must coincide with the list on the cardholder’s account. During the checkout procedure, the client inputs a verifying address, then compared to the verification data saved with the issuing bank. E-retailer should be able to confirm that the cardholder and the person submitting the order are the same through an order review, so it’s crucial to keep that in mind. Once it reaches the validated address, the issuing bank sends an AVS code to the shops.

If the cardholder and the person placing the order share the same billing address, it is likely that they are the one person. So, one way to confirm this is with AVS. Businesses may streamline shipping processes, lower costs, and decrease returns by verifying address information. Because of cost reductions from increased address data, businesses may find free shipping more financially feasible.

Overview of Online Address Verification System

Any company handling online transactions on a regular basis must have a set of order screening procedures in place. In addition to the obvious advantages of preventing fraud, order review procedures boost customer confidence. To give them more negotiating power in chargeback disputes, which eventually reduces chargeback costs. As these indicators advance, so does the technology that is employed to monitor them.

How does Validate Address Work in E-Commerce?

When checking out, the customer must input their billing address. When a person submits a transaction for authorisation, the online payment gateway will confirm the address by comparing it on file.

If there is a complete match, partial, negative or no match, retry, unavailable the issuing bank gives such response indicating. That’s it, but let’s dig more into the details.

First, only numbers are being validated when confirming an address, a customer’s zip code, and a residential address number, thus having trouble completing a transaction from them.

Never forget that AVS is only a small part of a wider fraud prevention puzzle. Fundamentally, verification of address is a crucial component of fraud protection,  the more information that must be restricted to the cardholder is sought, the better the chances are of lowering chargebacks and fraud.

Why is AVS Considered in E-Commerce?

It ensures that customers are safeguarded against fraud from an ethical and customer service perspective. Businesses are built on trust, and effective order review procedures are essential to running contemporary businesses. A single occurrence could result in substantial lifetime client losses.

AVS use is also reasonably priced. You almost surely lose the chargeback case customer later files a dispute and doesn’t mention AVS when checking out.

In chargeback instances, blame is frequently placed on the store rather than the customer, so it is important to have a strong defense in place before chargebacks even happen.

AVS is simply one part of the entire order evaluation process and is required to gather data on fraud prevention practices and keep records of them. Furthermore, as already stated, without AVS, and won’t even qualify for representation, ending any hope of avoiding chargebacks!


AVS is just one part of the multi-layered order screening and consumer prevention systems that also includes online address verification. Despite being an important player, it cannot succeed on its own. Therefore, it is up to design a seamless system that prevents scammers at every turn.

In the long run, having a well-designed system and proper paperwork will save a ton of money from chargebacks. As an expansion of e-store chargebacks will pile up, so it’s crucial to deal with them promptly.


Related Articles