What Is an AVS Mismatch? (And How To Resolve It)

Dec 07, 2021

Vesta, an “end-to-end transaction guarantee platform” that is used for online purchases, has unveiled its first Global Card-Not-Present (CNP) Fraud Report. They analyzed millions of digital transactions between the first quarter of 2020 to the first quarter of 2021. 

A CNP transaction takes place when a sale happens without the customer physically presenting their card to the merchant. If the CNP transaction is fraudulent, the merchant is stuck with the liability.

The findings were eye-opening, as they discovered that the overall percentage of global transactions identified as potentially fraudulent were in the range between 10 and 13 percent. 

Striking The Perfect Balance

What makes tackling this growing problem so challenging is that you have to balance combating fraud while increasing approvals for legitimate transactions. 

One solution that many merchants are turning to is the Address Verification System or (AVS). As a fraud prevention measure used for card-not-present transactions like e-Commerce and phone orders, AVS requires the cardholder to give the full billing address for the card, which also includes the address and the zip code. The Card Verification Value or (CVV) is also used to prove that the purchaser actually has the card in their possession. 

AVS Mismatch

When a customer enters a billing address at checkout that does not match with the address on file with the card-issuing bank or credit card company, this is known as an “AVS Mismatch Error.”

Merchants can automatically set up AVS mismatch filters to flag suspicious transactions well before they happen. AVS serves as a fraud prevention measure to help authenticate CNP transactions both online and on the phone. 

With this system, the buyer has to provide personal information such as their address, zip code, and CVV code. This allows a cross-check system to verify if the cardholder actually has the card in their possession or if they are the real owner of that card. If any of these details do not match, this sends a signal to the issuer of the card that it has been stolen.

However, things are not always straightforward. Just because a merchant received an AVS mismatch alert, doesn’t mean that the transaction is fraudulent. With every order placed online, the payment processor issues a request for an AVS approval to determine whether or not there is an address match. If it is authorized, then the issuer will approve the processor to authorize that transaction. 

Resolving An AVS Mismatch

Whenever a merchant receives an AVS mismatch, they can choose one of the following actions:

  • Process the transaction again
  • Override the payment system
  • Approve the transaction, or simply cancel the transaction

When it comes to deciding which action to take, merchants must consider how well they can manage risk and how willing they are to trust their own customers. If the risk is higher and the merchant approves this transaction, they must be prepared to pay a higher transaction rate. Having to rerun the transaction also adds more risk since it can produce a pending charge. This can ultimately produce friction with a potential customer.

If there are any doubts related to a transaction, it is best to personally reach out to the customer to verify details and determine whether their information was entered incorrectly. It could simply mean that they have not updated their address on file. 

By personally reaching out to your customer, you are demonstrating to them that you care about protecting both them and your business from fraud. 

An Ongoing Challenge

The original purpose of AVS was to prevent CNP fraud. AVS filters work best if they are activated. Unfortunately, they fail to ensure whether a transaction is valid or fraudulent. AVS filters can be used as one of many tools within a comprehensive set of solutions to fight fraudulent transactions.

Let us help you get a high risk merchant account today!

Get Started

Award winning.

  • 2012
  • 2013
  • 2014
  • 2015
  • 2016

Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

Live Chat