OnVerify.com Official Blog

AVS is short for Address Verification System, which simply tries to map/match the the address given with the card holder’s address. This technology by it’s implementation is a weak one, and cannot be highly regarded due to several reasons: A recent change in address causes negative responses. Service only available in US and a few EU countries.

AVS provides following common results:

A – The address matched, but the zip code did not. This is for Mastercard, Visa, and AMEX users.
Y – Address matched, but the zip code did not for a Discover card user.
B – The street address was a match, but the postal code was in the wrong format for the international user.
C – The street addresses and postal codes were formatted incorrectly.
D – The street address and postal code match for an international user.
E – There was an error.
G – The service is not supported by a non-US user.
I – Address information was not verified by the international issuer.
M – T street address and postal code match for an international user.
N – There is no match for the zip code or the address.
O – No Response was sent.
P – While the postal codes match, the street addresses cannot be verified due to inconsistencies in the formats.
R – You should retry. The system is temporarily unavailable or has timed out.
S – The server is not supported by the user.
U – The address information is unavailable.
W – The nine digit zip code matches, but the address does not.
X – This is an exact match.
Y – Both the address and the zip code match.
Z – The five-digit zip code matches, but the address does not.
0 – There is no response.

Unless your customer base is not US only, do not use AVS. Just IP to county/city mapping will bring more information.

BIN is short for Bank Identification Number. It’s the first 6 digits of the credit card. BIN (first 6 digits) maps to a bank.

A BIN database provides the merchant with information about the issuing bank such as the country it is located in, the customer’s billing address and other helpful information. The merchant can use this information as a factor in deciding whether or not to approve a transaction. If a card’s BIN is not found in the database, the merchant can decline the transaction to avoid fraudulent activity.

Many online merchants also use BIN databases to determine what type of card is being used to pay for a transaction, such as a credit, debt, or prepaid card. The reason for this is that prepaid cards have a higher rate of fraud. Many merchants use a prepaid flag that will alert them when the card is prepaid so they can either inspect it more closely or simply reject it to be safe. Putting such practices into place can significantly reduce a merchant’s risk of loss from fraud.

Following information can be cross-checked and can add scoring :

1. Customer’s country and Bank’s country will most probably match. A mismatch may be flagged
2. Prepaid cards can be flagged.

One of the most notable database is available at: www.binbase.com

As I noted previously all orders are done from well know ips. If the ip maps to a proxy address, this is 100% fraud. If it does not map to a proxy server address, you can check

1. IPlocation country to billing address country
2. IPLocation city to billing address city
3. IPLocation provides some Latitude and Longitude value. You can calculate the distance to billing address. Any distance bigger than 1000 kms must warn you (+1 fraud score)
4. You can also check phone number against valid prefixes for IPLocation city/country and billing address
5. You must check zip code against city/country of billing and IPLocation address

Customers usually use different addresses for shipping and billing.  A Fraudster will also do the same, and more. An order of a valuable item to some mailbox, must catch your attention. (+1 to your fraud scoring system)

So you must validate and correlate shipping and billing addresses and information (Address Line, City, State, Country, Zip Code, Phone):

An address can be checked in itself as:

1. Address can be validated from some web services. For USA orders USPS apis can provide you more information if this address is valid or not. Google Maps or Yahoo Maps provide similar information.
2. There are databases for Zip Code to Area Code and visa verso.  In a given zip code area code of the phone numbers are known before (except mobile numbers)
3. Ip Address to Country and even City Check. When order is done, it’s done over a well known IP (If it’s done over a proxy address you can totally discard the order, no need to go further). There are several solutions that map an IP to Country and City level in address. So a check for IP Address mapping will help

Shipping and Billing Address can be checked for:

1. Country check. It’s very low probable to order to another country from another country. +1