Do I need to add both zip code and address for AVS to qualify for better interchange rates?

No. This article provides an in-depth review of AVS as it applies to Visa. AVS is an abbreviation for address verification service. Today we review what it is used for and how it impacts merchants for Visa cards. All of the rates shown are true interchange costs as published by Visa. Some industries may have different interchange rates, such as hotels, but the principals are the same.


Assumption:  Retail merchant key enters a transaction, with the customer present. Visa requires the zip code to match or full address match. The resulting qualified interchange rates vary depending on the card type:

  • CPS/Retail Key Entry, Debit, exempt Visa Check card – 1.65% + $0.15
  • CPS/Retail Key Entry, Debit, regulated Visa Check card – 0.05% + $0.21
  • CPS/ Retail Key Entered Credit, Visa Signature preferred- 2.10% + $0.10
  • CPS/ Retail Key Entered Credit, CPS/Rewards 2- 1.95% + $0.10
  • CPS/ Retail Key Entered Credit,Other-  1.80% + $0.10
  • Commercial cards- 2.05% + $0.10

What happens if you do not enter the zip code, or it does not match?  Automatic interchange rate downgrade to non-qualified rate EIRF. The transaction will still be approved unless the merchant has special programming to reject it, which is atypical, but the cost will go up.

  • Electronic Interchange Reimbursement Fee (EIRF), Debit- exempt Visa Check card -1.75% + $0.20
  • Electronic Interchange Reimbursement Fee (EIRF), Debit- regulated Visa Check card-  0.05% + $0.21
  • Electronic Interchange Reimbursement Fee (EIRF), Visa Signature preferred- 2.40% + $0.10
  • Electronic Interchange Reimbursement Fee (EIRF), most other Visa cards- 2.30% + $0.10
  • Commercial Electronic Interchange Reimbursement (EIRF) Fee- 2.75% + $0.10

This article does not cover every possible card option. It’s clear to see from the examples shown that not passing the correct data results in higher interchange fees to merchants from .10% to .65%. This profit does not go to your processor, but rather to the card issuing banks.

What can a merchant do to better manage interchange?

  • Ensure point of sale equipment is programmed to prompt for AVS for key entered transactions. This may not be possible with some equipment.
  • Train employees to not bypass the prompts for additional information.
  • Use technology solutions to manage interchange fees paid. For example, I offer merchants CenPOS SaaS. With this service, employees are automatically prompted for the correct data needed to qualify this and any other transaction. Merchants are given the tools to stop employees from impacting their cost of accepting credit cards, as well as impacting risk of accepting cards.

A future article will address card not present, AVS, and chargeback risk mitigation. Are you confident that your processor or agent is able to help you manage interchange? If not, call now.

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