From October 1, 2022, the rules regarding payment by credit card and debit card are going to change. A new rule has been introduced by the Reserve Bank of India, which will come into effect from October 1. This rule is Card on File (CoF) tokenization, will change the payment experience of debit and credit card holders. If you have not yet tokenized your card then you can contact your bank.
The last date given by RBI to bring it into effect was 1 July, but it has been later extended to 30 September. Many merchants have already completed this under Card on File Tokenization, but there are still many more. So far, tokens of 19.5 crore people have been issued under this rule.
RBI new rule
RBI had last year barred commerce websites from saving customer card details and made it mandatory to accept tokenization. This rule will be brought into effect from next month.
In online payments, many entities, including merchants, store card data such as card number and last date – card-on-file (COF) – bringing convenience and comfort to cardholders. However, it can also prevent fraud, as the availability of card details with multiple entities increases the risk of card data theft or misuse.
what is tokenization
Tokenization is a process of converting sensitive data into ‘non-sensitive’ data, known as “tokens”. These tokens convert the debit or credit card holder’s 16-digit account number into a digital credential that cannot be stolen or reused. With the help of this token, you can save and transact from any site. There is also no risk of fraud or tampering with it.
impact on customers
Card credentials cannot be stored. For example, when customers make a purchase on an e-commerce site for the first time, they are asked to feed a 16-digit debit card number and then the CVV code. However, when they buy any other item from the same platform, they can see that the site has already saved the 16-digit card number and all they have to do is enter the CVV and then the OTP is generated by the bank to make the purchase. Is.
Once customers start buying an item, the merchant will initiate tokenization and ask for consent to tokenize the card. Once consent is given, the merchant card will send the request to the network. The token will act as a proxy for the 16-digit card number and send it back to the merchant. The merchant will save this token for future transactions. Now they have to enter CVV and OTP as before to give approval.