The Address Verification System (AVS) is used to verify the identity of the person claiming to own the credit card. The system crosschecks the billing address of the credit card provided by the user with the address on file at the credit card company.
Specifically the AVS verifies the numeric portions of a cardholders billing address. For example, if your address is 520 Main Street, Provo, UT 84601, AVS will check 520 and 84601. Sometimes AVS checks additional digits such as an apartment number, other times it does not.
If the AVS does not find a match between the billing address of the credit card provided by the user with the address on file at the credit card company the merchant will most likely be charged a higher interchange rate due to the risk of the transaction.
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