Accepting credit cards come with risks, especially for businesses that sell online or key-enter credit card details.

Fortunately, there are several tools you can use to protect yourself and your customers. The three tools we’ll discuss in this article are available from virtually all credit card processors, meaning any business can use them. The tools are Address Verification Service, Card Verification Value, and 3D Secure technology.

If you’re new to taking credit cards, this article will give you all the details on how to start using fraud protection. If you’re already taking cards, keep this information handy as a reminder for staff training.

1. Address Verification Service

Address Verification Service (AVS) is one of the most common and useful anti-fraud tools for online businesses or companies that enter credit cards by hand. It’s supported by almost all credit card processors and provides useful information to help you spot possible fraud.

How it works:

Address Verification compares the name and address a customer provides with the information on file with the credit card company. It provides a letter code to indicate if the information matches, doesn’t match, or partially matches. For example, a street address might match and zip code may not.

See the full list of letter AVS codes.

How to use it:

AVS allows you to manually or automatically decline transactions. You can choose to review the codes yourself, or set filters to automatically decline if a transaction is assigned a particular code.

For example, you may choose to automatically decline any transaction that receives a code indicating that neither the street nor the zip code given by the customer matches the information on file. Check with your processor if you have specific questions about setting up AVS filters.

Why you should use it:

In addition to helping prevent fraud, AVS is a required component for some interchange categories or the categories that determine your wholesale cost for credit card processing. This means that if you use AVS appropriately, you may actually qualify for lower processing costs.

Additionally, AVS can help your case if you receive a chargeback. In its merchant guide, Visa indicates that businesses who receive a chargeback after authorizing a purchase that passed AVS with certain codes may be better protected than those who didn’t use AVS.


The cost to use AVS varies by the processor, with some choosing to add a small fee to each transaction that uses AVS. Fees generally range from 1 cent to 10 cents per use, but could be more or less depending on your processor.

Additionally, MasterCard charges a very small fee to use AVS, which your processor does not set and cannot change. MasterCard currently charges $0.0075 per transaction for AVS for card-not-present (online) transactions, and $0.005 per transaction for AVS for card-present transactions. Visa does not charge for AVS.

Keep in mind that the costs to use AVS are generally very small and can save you a lot of money both by potentially qualifying you for lower interchange and by preventing costly chargebacks or fraud.

2. Card Verification Value/Card Verification Code

Card Verification Value (CVV) and Card Verification Code (CVC) are numbers to verify a credit card. The number is printed on the physical card and cannot be stored by businesses.

How it works:

The CVV is a number used to prove that a customer has the physical credit card when making a purchase. Since unauthorized users often only have the card number, requiring the CVV helps weed out those purchases.

Visa, MasterCard, and Discover CVV/CVCs are three digits, located on the back of the card by the signature panel. American Express CVVs are four digits, located on the front of the card, separate from the card number.

How to use it:

When taking credit cards online or by hand-keying, you can enable a field for CVV. As with AVS, you can choose to manually or automatically decline transactions for a CVV mismatch. Contact your processor if you need help setting up the CVV authentication on your site or machine.

Why you should use it:

CVV is a basic layer of defense. When required for online transactions, it helps ensure that the purchaser has the physical credit card and is not simply using stolen credit card numbers. When used for an in-person keyed transaction, it may help reduce your expenses.

Keyed transactions are generally considered higher risk and come with a higher cost to process. Inputting the CVV at the time of sale helps validate the transaction as legitimate, which may help keep the costs down.


Visa does not charge for CVV; MasterCard charges a small fee of $0.0025 per transaction where CVC is used. CVV/CVC does not usually incur additional fees from the processor, but be sure to contact your processor.

3. 3D Secure (MasterCard SecureCode and Verified by Visa)

3D Secure is a type of fraud prevention tool where three different parties are part of the authentication process: You, your acquiring bank, and the credit card company itself.

It adds another layer of security for situations where an unauthorized user actually has the card, and will pass the CVV test. With 3D Secure, the customer will need to enter a personal code at the time of checkout, which unauthorized users won’t know.

The 3D Secure options available are Verified by Visa and MasterCard SecureCode. These two tools are exclusively beneficial to ecommerce businesses—they can’t be used in person.

How it works:

When your customer makes a purchase on your website, they will complete your usual checkout process and provide card details, and then be directed to a secure form to input their 3D Secure passcode. Successful authentication will allow the transaction to continue as usual.

Some businesses may view the additional step in the checkout process to be a drawback. Be sure to consider the effect on your customers.

How to use it:

You’ll need to contact your credit card processing company, and in most cases install a plugin to authorize transactions.

Why you should use it:

The United States is in the midst of the switch to chip credit cards, and it has been reported that when a country switches to chip cards, fraud typically increases online.

The U.S. is still early in its adoption of chip cards, but as it gets harder to commit fraud in person, fraudsters will turn to the internet. Utilizing all the anti-fraud tools at your disposal can help protect you and your customers.

Both Visa and MasterCard offer benefits that you may qualify for if you use 3D Secure. Visa states that liability for fraud may shift from you to the issuer; MasterCard states that you’ll be better protected in cases of chargebacks and customer dispute since SecureCode is considered a high level of identity verification.


Neither Visa nor MasterCard charge extra directly to use 3D Secure technology. If you need to purchase plugins or contract a developer to implement the technology, you’ll have to pay those costs. Contact your processor to inquire about any additional fees for 3D Secure.

Whether you’re new to taking credit cards or a seasoned business owner, keep this article handy. If you switch processors or train new staff, it can act as a helpful guide to remind you what tools to ask your processor about or teach to your team.

AvatarEllen Cunningham

Ellen is the Marketing Manager for CardFellow, leading provider of free credit card processing comparison tools. She has a degree in English and spends her days researching and writing about everything related to credit card processing.