[ryukoposting]

Interesting, is the German postcode not used for transaction validation? I know the American payment processors definitely use ZIP codes for validation - see anecdote 1.

That said, there are definitely situations where the payment processors don't require the ZIP code - see anecdote 2.

Anecdote 1: When I worked in food service as a kid, I used card terminals that connected directly to a phone line. I remember a couple of times when I entered the ZIP code incorrectly - the card terminal would print out a receipt with an angry message saying the transaction got rejected. So, I know they were using the ZIP code to validate the transaction.

Anecdote 2: With those same card terminals, you could skip the ZIP code and it would run the transaction as usual. But, my manager always told me not to do that. Maybe I never asked him why, or maybe I forgot his answer. Regardless, I don't remember why we he required us to enter the ZIP code, even when it didn't seem to be necessary.

[quesera]

ZIP codes are used as a weak "something you know" factor in payment card processing.

The card is (for card-present transactions) "something you have". And the ZIP complements that. ZIP code is optional, but the merchant gets a data integrity score back from the network ("AVS/address verification service response", from no match to full match), and can accept/decline the txn at their discretion.

Because it's optional and at merchant discretion, all it really does is give the merchant some additional ammunition when disputing a chargeback. And of course to build a demographic database.

[lilyball]

The answer to anecdote 2 is probably that if the seller chooses to skip validation measures on the transaction, then they become liable in the event the transaction is deemed fraudulent.

[kwhitefoot]

> is the German postcode not used for transaction validation?

No. The only time I have ever been asked for a post code was when a petrol pump in the US demanded my zip code. I have no idea what it meant, I just put some random zip code for the general area I was in and it was accepted. I've never been asked for my post code in Europe; I can't speak for the whole of Europe though, just UK, Spain, Ireland, Portugal, France, Belgium, Netherlands, Italy, Germany, Poland, Denmark, Sweden, Norway.

[ryukoposting]

It's very interesting to know that postal code verification isn't the global M.O... I've been curious about this for a while and you've provided some valuable context.

FWIW: the pump was asking for the ZIP code of the billing address you have on file with your bank. If I typed in a random ZIP code, my card would get declined. I'm pleasantly surprised someone actually thought to handle the "foreign address" case, even if it's silly that the machine forced you to provide a ZIP code in the first place. That's how low my bar is for payment processing networks, I guess.