A payment gateway provides extra layers of security: when a customer enters their card details online, the gateway performs fraud checks and encrypts the data, before passing it onto an issuing bank, which authorises the transaction following additional fraud screening.
Aside from the encryption of cardholders’ personal data, and the layers of protection from transferring data with the issuing bank, there are other ways that payment gateways can protect your business from fraudulent activity. For example, a transaction can be rejected if the card is expired; there are insufficient funds; a credit limit has been exceeded; or a bank account has been closed.