How AVS and CVV Filter Fruad

AVS and CVV are excellent fraud filters.  When accepting credit cards, there is always the risk of encountering a fraudulent transaction. In fact, sometimes businesses will have to take a revenue loss due to chargebacks, some of which will be fraudulent. In order to prevent this, there are two major tools available: AVS and CVV. These are two filters that have been designed to guard against fraudulent transactions and prevent chargebacks, especially in the realm of online business.

AVS: Address Verification System

The AVS is a system which authenticates a user by checking their provided billing address, against the billing address recorded by the customer’s bank. The system verifies two fields: the street address and the zip code. The verification process is fairly straightforward. The customer will provide the relevant information, which is then forwarded through the payment gateway or the POS to the merchant’s processing bank. The bank then forwards the information to the customer’s card issuing bank through the AmEx/Discover/MasterCard/Visa networks.

If the information matches the data on file, the transaction goes through. If it does not, the transaction is rejected by the issuing bank, which means that all customer complaints can be directed there. The merchant or the payment gateway does not determine whether the AVS matches or mismatches.

CVV: Credit Verification Value

The CVV is the 3 digit code that can be found on the back of cards from Discover, MasterCard, and VISA, or the 4 digit code found on the back of cards from AmEx. In the case of AmEx, however, the code is called CID. The CVV verification process is pretty much the same as the AVS process. The CVV is verified by the issuing bank, and if a match is positive the transaction goes through.

Working with CVV and AVS

CVV and AVS are two security filters set up for companies that routinely work with new customers. For businesses that operate primarily in the B2B realm or with customers that already have an established reputation, CVV and AVS are not as important. In any case, it’s important to note that without CVV and AVS verification, it’s a lot harder to win a chargeback case.

There are several other rules to take into consideration, if you want to be fully protected against chargeback fraud. For example, if you have a positive AVS match, but you ship the purchased goods to a non-AVS verified address, your chances to win a chargeback dispute are lowered. There are several ways to work around this issue. To start, you may require extra verification from first time customers, and then lower requirements for repeat purchases, since requiring an AVS verified address for shipping can make certain transactions more difficult.

Ultimately, CVV and AVS are two easily accessible security systems that can help prevent credit card fraud, and they are flexible enough to allow businesses to tailor their offer to balance security and customer convenience.

For more information on the AVS and CVV security systems, or to open a merchant account, please call (888) 924-2743 or go to


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