The Address Verification Service (AVS) is a fraud prevention system used by credit card processors to verify that the billing address provided by a customer matches the address on file with the card-issuing bank. AVS is commonly used in card-not-present transactions, such as online or over-the-phone purchases, to help mitigate the risk of fraudulent transactions.

Here's how AVS typically works:

1. **Customer Provides Information**: During a transaction, the customer enters their billing address along with their credit card details.

2. **Merchant Submits Request**: The merchant submits a request to the payment processor, which includes the billing address information provided by the customer.

3. **Verification with Issuing Bank**: The payment processor forwards the billing address details to the card-issuing bank, requesting verification.

4. **Response Code**: The card-issuing bank compares the submitted billing address to the address it has on file for that credit card. It then sends back a response code indicating the result of the comparison.

5. **Transaction Decision**: Based on the response code, the merchant decides whether to proceed with, flag, or decline the transaction. Common response codes include:
    - Match: The address provided matches the address on file.
    - Partial Match: Some parts of the address (e.g., ZIP code) match, but other parts (e.g., street address) do not.
    - No Match: The address does not match.
    - Unavailable: The issuing bank does not support AVS or did not provide a response.

AVS is a useful tool in reducing the risk of fraudulent transactions, although it is not foolproof. It is most effective when used in combination with other fraud detection measures like CVV (Card Verification Value), 3D Secure, and machine learning models for fraud detection.

Keep in mind that AVS is more commonly used and more effective in some regions (like the United States, United Kingdom, and Canada) than in others, where the system may not be as widely supported or used.