Debit and Credit card ‘tokenisation’

‘Tokenisation’ of credit and debit cards, is ready to kick off from October 1, 2022, that refers to the replacement of actual card details with an alternate code called 'token'. A token contains no personal information that can be accessed and keeps changing. Tokenization as a technique is a reform that will go a long way in enhancing the security of online transactions.

The Reserve Bank of India (RBI) has directed payment aggregators, wallets and online merchants not to store any sensitive card related customer information, including full card details. The 16-digit card numbers will get replaced with a ‘token’.

The only way that you can conveniently make a card payment repeatedly is through a new process called ‘tokenisation’. With this technology update, the transactions using cards will remain unaffected by the card tokenization process, rather, it will make transactions more secure.

Until now, whenever you bought things from e-commerce websites or booked train or flight tickets through a travel website you had to save your debit or credit card details for ease in future transactions.

You would only enter the three digit CVV number and checkout of the payment transaction within seconds. But saving card details in the current form is risky. There are instances of popular websites getting hacked by fraudsters and harvesting the saved card data.

To tackle this RBI came up with the very vital solution of tokenization, through which one’s sensitive card information can be replaced with a non-sensitive uniquely generated code called ‘Token’.

Tokenization comes in as the right move to keep customer data safe as the priority. It also ensures quick checkouts and convenient card management for the end user.

Now while consumers enter all the card details on the merchant's website, they receive an option “secure your card as per RBI guidelines”. A Consumer has to opt for this option to generate a token.