Everything you need to know about tokenization

The final date for tokenizing your credit and debit cards is fast approaching, and if you don’t follow this new mandate from the Reserve Bank of India, you may need to give more time to make payments online. After numerous implementation delays, the credit and debit card tokenization rules will go into effect on October 1. Under these rules, domestic merchants cannot store your card information, such as card number and CVV, when you make an online payment. The RBI has notified these tokenization guidelines to make the online payment system more secure and secure through which consumers will have the ultimate authority before anyone can access their sensitive information.

Everything you need to know about the new credit card and debit card rules

1. What is debit card, credit card tokenization?

A. According to the RBI website, “Tokenization refers to replacing the actual card details with an alternative code called the ‘token’, which must be unique for a combination of card, token applicant (i.e. say the entity that accepts the customer’s request for the tokenization of a card and transmits it to the network of the card to issue a corresponding token) and device (hereinafter referred to as “identified device”)”. Customers who carry out transactions online have already received notifications to register or tokenize their card before October 1, which means the deadline is September 30.

2. Is tokenization mandatory?

A. No, debit and credit card tokenization is not mandatory. A customer can also choose not to tokenize their cards, but in this case online payment will take longer.

3. What is the need for tokenization?

A. The RBI has repeatedly said that a token card will ensure that there is less fraud committed in terms of domestic online payments. Credit and debit card tokenization does not allow merchants to store your data and also provides an additional layer of protection by capturing your CVV and received OTP, making online transactions safer.

4. How can I tokenize my debit and credit cards?

A. The cardholder can get the tokenized card by initiating a request on the application provided by the token requester, which is the customer. The token requester will forward the request to the card network which, with the agreement of the card issuer, will issue a token corresponding to the combination of card, token requester and device. Read the detailed process here.

5. What will happen if I don’t tokenize debit and credit cards by September 30?

A. If you do not tokenize your card by September 30, you will need to re-enter all card details when making any online purchases. This is because existing data, including your name, card number, and CVV, will be removed from the server. Tokenization only applies to domestic online transactions and you do not need to complete the process for international online transactions.

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