: Are Zip/Postal codes a viable requirement for credit card validation? So I'm creating a form for users to purchase things from my site, and currently, I have the following fields (all required):
So I'm creating a form for users to purchase things from my site, and currently, I have the following fields (all required):
Email
CC Number
CVC
Expiry MM/YY
Name on Card
Billing Postal Code
But I'm curious about the viability of that last one. My payment gateway supports validation of those fields when charging a card, and I'd like as much as possible when validating a payment to prevent fraud. However, in doing a bit of validation research, I came across this very helpful map on the postal code Wikipedia page that details where postal codes of what length are used. And in looking at the map, there are some countries that don't use a postal code, which would likely mean validation based on that may not work as a required field.
For example, from the looks of the map, Ireland does not seem to have a postal code. Does that mean that postal codes cannot be used to validate credit card transactions there? Clearly if they don't have a postal code, making it a required field seems problematic.
But, in doing the transactions, I'm also going to need to do verification for sales taxes that need to be paid, and Zip/postal code seems like the best way to accomplish this.
Is Postal Code a valid required field when processing credit cards? And if not how can I support international sales with a decent level of fraud prevention, and still be able to calculate sales tax worldwide?
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If you're doing business in the United States you're going to need to collect the zip code for credit card processing reasons. It is used as part of the Address Verification System (AVS) which occurs for all non-swiped credit card transactions. By not capturing it, and then providing it when processing the transaction, at the very least you will force the merchant to incur higher processing fees due to the missing zip code. Without the zip code AVS cannot be performed and the risk for that transaction is higher. The merchant account provider passes on their increased costs due to risk to the merchant.
International sales are by their very nature higher risk. Lack of AVS and CVV verification are just two of the reasons for this. The fact that fraud is much more common in most countries outside of the US, especially outside of North America and Western Europe, is part of the business (and a reason why many merchant account providers will not establish a merchant account for merchants who do business outside of the US).
If you're going to so international sales you need to consider limiting the countries you do business with. Not doing business in Asia, Africa, and the Middle East would be good places to eliminate as well as Eastern Europe.
Then focus on other risk factors to create a score that determines if a transaction is higher risk then normal:
Was overnight shipping chosen? Higher risk.
High ticket items ordered? Higher risk.
etc.
As far as calculating tax goes, you shouldn't need the zip code of international users for that. They obviously don't get charged US taxes and if you are collecting international taxes, their town and country should be enough for you to do the necessary math.
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