After the implementation of the new rules, customers will get the option of tokenization while making payment, which will prove to be helpful in protecting them from any kind of fraud.
The Reserve Bank of India (RBI) is tokenizing credit and debit cards to protect people doing digital transactions and online shopping from any kind of fraud. For this, laptops, desktops, smart watches or bands and Internet of Things, devices etc. have been included in the tokenization by RBI. That is, this rule will be applicable on the payment made from all these things. Only a few days are left for tokenization. Earlier this rule was to be effective from July 1, but the RBI extended its date to September 30. If there is no change in these rules this time, then the rule of tokenization will be applicable from October 1.
Know what is tokenization
When you process a card payment anywhere, that merchant platform saves your card details such as your card number, CVV, expiry date etc. on its database for an easy and fast payment experience. This has been happening till now, but it is not a safe practice in terms of your financial security. If the data of that website / platform / merchant is hacked, then your data can also be leaked. That is why RBI has introduced the option of card tokenization. After tokenization, a token will be generated for the transaction through the card. These tokens will allow payment to be made without disclosing customer details. After this the merchant will not be able to save your card details as you must have already generated the token for your card. Only your generated token will be given to the merchant.
Customers will get such benefit
- You will get rid of entering card details while making online payment. The option of tokenization will be available to every customer for his convenience. If you choose the option of tokenization, then you will have to enter only CVV and OTP.
- Customers shall have the right to register and de-register themselves for any of the services such as contactless, QR code or in-app purchases
- One card can be used for multiple merchants and multiple cards can be used for one merchant.
- Tokenization gives you the same payment experience as before, but it is much more secure and convenient.
How will tokenization happen?
To do debit-credit card tokenization, whenever you go shopping from your favorite website or app, you have to choose the option of tokenization. After starting the payment transaction process, you will have to provide the details of your debit or credit, in whichever mode you are making the payment. After this click on Secure your card or Save card edge by doing RBI guidelines (Save card as per RBI guidelines).
After this, here you will have to give your approval to make a token of the card. Then you will get an OTP on your registered mobile number or email, after entering it your token will be generated. Now your token is ready and after the transaction process is over, this token will be saved with the merchant instead of your card details and your data will be safe.
