Data Enrichment & Validation

Address Verification for Financial Services: How to Check Billing Addresses

December 22, 2020
Inkit Team

By 2022, the use of the Internet and mobile banking is expected to reach the striking 77.6% among US adults. People love to manage their finances on-the-go and instantly get access to credit card transactions.

Yet, the availability of online banking and its ease of use pose a severe challenge for banks. Financial organizations have to deal with the increasing risk of fraud, chargeback disputes, and scams. Attackers create fake accounts and provide invalid billing address information to complete fraudulent transactions and obtain citizens’ personal records online. This results in financial losses and legal issues on the banks’ side.

To avoid such troubles, financial organizations have to invest in data checks and security. They need specialized software to collect contact information and automatically match it with the official records. Such credit card address verification will allow them to make sure the physical address is valid and, hence, the person who owns a card and pays with it is the same individual. Then, the credit card transactions are safe and ready for further processing by payment gateways.

To learn more about the role of address verification in finances and how to check billing address for a credit card, read about:

  • What is credit card address verification?
  • Why implement credit card address verification for financial services
  • Four steps to check the billing address for a credit card
  • How to verify an address with Inkit?

What is Credit Card Address Verification?

Credit card address verification is a process completed jointly by financial services, credit card processors, and merchants to compare the address provided by a customer at the checkout with the billing address recorded by the issuing bank. It is also called an AVS check and is used mainly in the United States, Canada, and the United Kingdom.

payment bill

Today, such credit card address verification is fully automated with AVS services and takes seconds. Upon completion, each transaction is assigned an Address Verification Service (AVS) code and considered safe or unsafe based on it.

For example, Y response codes mean that both street address and ZIP code match, whereas Z AVS codes signify that only ZIP codes match. Thus, the Y-code credit card address verification is safer than the Z-code check.

Why Implement Credit Card Address Verification for Financial Services

Before we talk about how to verify an address, let’s clarify why a bank might need it.

The first reason to validate addresses is internal security. When you establish a credit card applicant’s identity, you protect your institution from possible fraudulent activity. It becomes easier to check transactions and reach the person with official communications, statements, notices, etc.

Secondly, you become regulatory compliant since banks are required to deliver print statements to customers every month. The failure to do so will lead to reputational losses, fees, and sanctions.

Finally, credit card address verification is a must-have to become a market leader with quick online credit card payments and AVS verification. Without it, you just won’t be able to serve online businesses.

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Four Steps to Check the Billing Address for a Credit Card

To complete full credit card address verification, sellers, credit card providers, and credit card issuers need to cooperate. In our previous blog posts, we’ve already explained how to verify an address through an AVS check and what steps it takes.

This time, let’s focus on the role of banks in such transactions. Whereas credit card providers (e.g., Visa, MasterCard, etc.) only redirect credit card address verification requests from the merchant’s website to an issuing bank, the bank does all the work. To validate addresses, financial services need to complete a range of time-consuming preparatory steps:

How to check billing address for a credit card step #1. START WITH THE REGISTRATION RULES

When people apply for a credit card, they must provide a physical address and additional proof of its validity. Thus, if you need to implement credit card address verification, inform customers what they have to do. This should help you enhance customer onboarding and collect more accurate personal information from the start. Make sure to mention requirements and limitations, including:

  • PO box, mailbox rental store addresses, or CMRA (Commercial Mail Receiving Agent) addresses aren’t considered a physical address.
  • For address matching, address data should follow the USPS official format (Learn more in the article on How to Write a Postal Address?)
  • To complete credit card address verification, a customer has to provide a valid proof of address document (e.g., utility bills, bank or credit card statement, driving license photo with address and expiry date, or any other government-issued document).
address verification

How to check billing address for a credit card step #2. COLLECT THE DATA

Once customers know what details they need to share, you are more likely to receive the correct data. You can now collect it manually at the bank or integrate the necessary functionality into your online banking system. Online forms that automatically request personal information at the registration are the most common solution. Many of them have an autocomplete that allows you to record address information correctly and instantly block any invalid addresses. This improves the quality of data and prepares banks for the next stage of credit card address verification.

How to check billing address for a credit card step #3. AGGREGATE AND STANDARDIZE

At this point, you will need to order your address lists. Make sure all address records have the necessary fields and follow the same format. To do that, we recommend using automation software that provides address normalization as a part of its core functionality. Such tools record, parse, standardize, and validate addresses. You will be able to quickly process credit card verification requests and achieve the maximum level of automation.

How to check billing address for a credit card step #4. RUN VERIFICATION

Connect AVS services to automatically complete address matching and check the reliability of billing addresses. They will compare the address data in a validation request with your records on file to generate AVS response codes. Based on these codes, the merchant’s system will confirm or reject credit card transactions.

How to Verify an Address with Inkit

reach customers

Since Inkit does everything automatically, you won’t need to worry about how to verify an address. Our Reach Enablement Platform allows financial services to implement address autocomplete, automatically verify physical addresses, generate custom PDF documents from HTML files, and automatically deliver them through multiple channels. Thanks to this, you can send billing communications by direct mail and deliver the same documents online depending on the customer’s preferences and legal requirements.

Inkit provides you with additional flexibility and does much more than standard credit card address verification tools. In addition to address validation, you get a chance to automate customer communications online and offline.

Besides, Inkit serves as a full-fledged platform for customer reach and connects with hundreds of third-party tools through a webhook. You can add up any functionality your financial organization needs and build complex integrations.

Have any questions about the use of Inkit for financial services? Contact our team to discuss your case.

Start verifying addresses today
Don't waste time and money dealing with lost shipments that never made it to your customers.
Start for free