The Reserve Bank of India has introduced Card Tokenization System (Card Tokenization) from July 1 to further secure the payments made by credit cards or debit cards and to prevent frauds on cards. System) has been decided to implement.
Under the new rules of RBI, from next month, merchant, payment aggregators, payment gateway’s as Visa, Mastercard, Rupay and acquiring bank (banks) will have to provide card-related information of customers. Will not be able to store card information.
Card Tokenization System (Credit Card, Debit Card Tokenization System)
This means that the customer has to enter his credit-debit card details every time to make a transaction.
According to the Reserve Bank of India (RBI), the card tokenization rule is going to come into force from July 1, 2022.
According to the new rule, businesses and other institutions will have to remove information related to credit and debit cards.
What is Debit/Credit Card Tokenization? (What is Card Tokenization System)
Under Token Services, a unique alternate code is generated for the transaction through the card.
It is the process of substituting a 16 digit customer card number with a non-sensitive equivalent value called a token.
This means that the customer’s card information will no longer be with any merchant, payment gateway or third party.
Due to card tokenization, customers no longer need to worry about their card details.
Cardholders will have to give an explicit consent which will be collected for the token.
Why are tokenized card transactions considered clean? ( Why Card Tokenization is safe?)
Tokenized card transactions are considered safe as the actual card details are not shared with the merchant during transaction processing.
To track the transactions, the entity can store the last four digits of the number and the name of the card issuer.
The customer’s consent and OTP-based authentication are required to create the token.
With this move of RBI, transactions through credit and debit cards will be more secure than before.
In this, the information related to your credit and debit cards will not be saved with the merchant at the time of transaction.
Card Tokenization Deadline (start date)
RBI’s first deadline for tokenizing card details was June 30, 2021.
But at the request of merchants and payment aggregators as well as card companies and banks, it was extended till December 31, 2021.
After this the deadline was again extended to six months. The deadline for credit, debit card tokenization is June 30, 2022.
This is the way to tokenize credit and debit cards
You have to pay to buy things by visiting any shopping website/application.
At checkout, select your preferred card payment option and enter CVV details.
Then click on “Secure Your Card” or “Save card as per RBI guidelines”, Tap on Save and Enter OTP
Your card will now be successfully tokenized and secured.
You will also get a confirmation message when the card is successfully tokenized.
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