In today’s world of rampant identity theft, systems like the Address Verification System help to confirm the identity of credit card holders during the processing of an order. The Address Verification System matches the numeric portions of a credit card holder’s address in an attempt to ensure the credit card number and/or expiration date have not been stolen. Card holders, merchants and credit card companies all have a stake in ensuring that the card owner is indeed placing the order for services or merchandise.
Traditional brick and mortar stores typically do not use the Address Verification System since the card holder is present and further identification, such as a driver’s license, can be requested by the merchant. In e-commerce and telephone sales, however, the Address Verification System is used quite often. This is because it is easier to commit identity theft and use a stolen credit card online or over the phone.
A company that uses the Address Verification System will typically ask the consumer for the billing address of the credit card being used. The numeric values of the street address and zip code are bounced against the records on file with the credit card company nearly instantaneously. If the numbers do not match, the transaction may be declined. If the Address Verification System is not used at all, the transaction also may be declined.
It is important to note that the Address Verification System is not required by the credit card company in most cases. It is an optional level of security that merchants or credit card banks may choose to enforce in order to reduce liability. A bank or credit card company may charge a higher fee if the additional layer of security is not used, or a merchant accepting orders may choose to make it a mandatory policy within the company.
A further level of security is called the CVV2 number. This is a 3-digit number on the reverse side of the credit card near the signature line. Merchants requesting a CVV2 code during a credit card transaction are attempting to further prove the rightful card owner is the one making the purchase.
The Address Verification System is limited mostly to the US, Canada and the United Kingdom. Few other countries support this level of security. MasterCard® and Visa® are the primary credit card companies to utilize the Address Verification System, and American Express® limits the use of the system to the US only.