RBI or Reserve Bank of India has mandated a tokenization system for credit and debit cards before September 30. With this system, all the credit and debit cards, used in online purchases, sales, and in-app transactions, are to be switched by the distinctive tokens by or before September 30, 2022.
Tokenization For Credit And Debit Cards
The whole motive behind this tokenization system of Credit and Debit cards is to provide a higher level layer of security and a smooth transaction experience for the bearers. All the transactions will be secured while being encrypted as a ‘token’, this encryption process will make your transactions more secure.
The most beneficial point of using encrypted tokens is that in every transaction customer details will not be disclosed. RBI has taken a step and made it mandatory that all the original cards will be replaced with an encrypted token.
“Tokenization refers to the replacement of actual card details with an alternate code called the ‘token’, which shall be unique for a combination of card, token requestor (i.e. the entity which accepts a request from the customer for tokenization of a card and passes it on to the card network to issue a corresponding token) and device (referred hereafter as “identified device”)”, as per RBI.
You should know that for the simplest form of payments, the customer’s details like CVV, card number, and expiry date were always mentioned and maintained on the customer database of every card issuing firm. Thus, putting the data of the customers at risk of exposure. And it has happened in the past, that the data has been compromised from the website’s data storing system.
But now, “Debit or credit card information cannot be stored by any entity other than card issuers or networks”, as per RBI guidelines.
The new credit and debit card tokenization rules were to be in effect from July 1, 2022, but due to requests from different industry organisations the deadline was extended.
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Ways To Create Tokens For Card Transactions:
- First, choose your product from any website or application to purchase and begin the transaction.
- Then select your card and enter all the details required.
- You will see different options on distinct websites or apps including, “secure your card as per RBI guidelines”, and “Tokenize your card per RBI guidelines”. Choose any of them to secure it.
- Verify your request and transactions with OTP, which will be received on your registered mobile number.
- After submitting the OTP token will be created.
- If you want to recognize your card then use the last 4 digit reference from the site or app.
