What service does Address Verification Service (AVS) provide?

Address Verification Service (AVS) plays a crucial role in enhancing transaction security by verifying the cardholder's billing address associated with the credit or debit card being used for a transaction. When a customer makes a purchase, AVS checks the address provided by the customer against the billing address on file with the card issuer. This verification helps confirm that the person making the transaction is indeed the legitimate cardholder, thereby reducing the risk of fraudulent transactions.

By ensuring that the billing address matches, AVS serves as an important tool for merchants to identify potentially fraudulent activity before processing the transaction. In many cases, if there is a mismatch between the addresses, the transaction may be flagged for further review or declined, which adds an additional layer of security.

In contrast, the other options do not accurately describe the primary function of AVS. For instance, AVS is not responsible for approving high-value transactions, encrypting card data, or independently detecting real-time fraud. Its focus is solely on verifying billing addresses as an effective means of fraud prevention during card-not-present transactions.