Card Tokenization Rules: From January 1, 2022, the ‘card payment method‘ will be changed. The Reserve Bank of India issued the rules of tokenization concerned with data storage, which will come to effect from 01st January 2022. The new payment method by cards includes a special provision related to the privacy of the card holder’s data.
Understand The Term “Card Payment Method”
From the given date, the customer will not need to share his card details with any third-party app. Think of it like you don’t need to share card details while making an order to food delivery apps like Zomato, booking Ola or Uber. As of now, the complete details of the user’s card are saved on these apps which lead to a risk of any kind of fraud with the customer.
Now, with a card tokenization system, such a threat will not happen. However, customers are free whether to take this service or not. No banks or card issuing companies will put pressure on customers to take this service.
What is ‘Tokenization Rules’?
As per the Reserve Bank of India new rules, to be in action from January 1, 2022, no physical card data storage other than the card-issuing bank or company. Under this rule, the pre-stored data will be filtered. However, for the reconciliation process and transaction tracking, entities may only store limited data. This data store only usage up to the last 4 digits of your card number and issuer’s card name.
Tokenization Rules Applied On Payment From Laptop And Smartwatch
The rule will apply to payments made through CoFT laptop, mobile, smartwatch, desktop, etc. Tokenization rules facility is only applied for cards issued. The ability to tokenize and de-tokenize card data will depend on the token service provider. Tokenization of card data might be done as per the customer consent.