The ‘negative database’ is a vital risk management tool developed by payment aggregators to enhance ecosystem security. It contains records of merchants, merchants, or entities with a history of fraudulent activities or policy violations. By centralizing this information, the database helps identify and block high-risk entities before transactions are processed.
This approach significantly reduces fraudulent activities and protects businesses from financial and reputational damage. Payment aggregators regularly update the database to maintain its accuracy. This builds trust among merchants, users, and regulators in the payments ecosystem.
