Online Anti-Fraud Tools

With the rise in popularity of online shopping, more customers are handing over credit card details on the internet. While that results in more sales for you, it also increases the chances of a security problem. Many businesses aren’t aware of or don’t use the anti-fraud tools at their disposal when it comes to online transactions. In this article, we’ll talk about a few options and how to implement them.

Address Verification

Address Verification Service (AVS) is one of the most common tools and can be considered a first line of defense. With AVS, the customer’s billing address will be compared with the billing address on file at the credit card company. If there’s a mismatch, you can choose to be alerted to the transaction to investigate further or decline it automatically. You’re not required to decline transactions that fail AVS, but it’s a good idea to consider it.
Benefits: Aside from acting as fraud deterrent, correctly utilizing AVS may help you qualify for lower cost interchange categories and help you defend against charge-backs.  
Cost: Varies. The typical AVS fee ranges from 1 cent per transaction to 10 cents, but some processors may charge more or less. Additionally, Mastercard charges a small fee for AVS, which your processor has no control over. Despite the fact that AVS can add a few cents to your costs, it’s generally a good idea to use it. It can help you pay less at interchange and it’s a crucial first tool in your fight against fraud.
Imeplementing AVS: You can work with your processor or gateway provider to set up AVS. Results of the AVS check will include a letter code. You can match that letter a key that explains what that letter result means. For example, a result of “N” would mean that neither the street address nor the customer’s zip code were a match.  
3D Secure
3D Secure  tools – such as Verified by Visa and MasterCard SecureCode – are more advanced fraud protection, but also more complex. The first iteration of 3D Secure required consumers to register in advance with their bank, setting up a pass code that they’d enter when making a purchase from a participating online business.


However, a popup window was required for entering the pass code. Some customers were distrustful of the popup, while others abandoned their carts due to the extra step in the checkout process. Neither of those are good for e-commerce businesses, who fight to keep cart abandonment rates low and build trust with customers.

Since then, the card companies and some third parties have been working to create a more seamless version of 3D Secure, which will not require entering a pass code into another window.


Benefits: As with AVS, a primary benefit of 3D Secure is that it reduces the risk of fraudulent transactions. Additionally, you may qualify for reduced interchange fees through Visa’s CPS program. Mastercard and Visa also state that you may limit your liability for chargebacks when properly using 3D Secure on your ecommerce site. This can be extremely beneficial in instances of “friendly fraud” where AVS and other tools may not catch the fraud.  


Costs: The credit card companies themselves don’t charge you to use 3D Secure, so costs are minimal. Your processor may impose a setup fee or other small charge if they desire.


Implementing 3D Secure: Contact your processor to inquire if they support 3D Secure. If not, you may still be able to work with a third party company to enable it.


For businesses accepting payments online, fraud prevention is crucial to your success and growth. Implementing powerful anti-fraud tools can help keep your business running smoothly.



Ellen Cunningham is the marketing manager for CardFellow, a leading resource for accurate information in the credit card processing industry. She writes about all aspects of credit card acceptance and enjoys helping businesses find the right solution for their needs.


For businesses accepting payments online, fraud prevention is crucial to your success and growth. Implementing powerful anti-fraud tools can help keep your business running smoothly.