RBI decision on Card Tokenization: RBI started Card on File Tokenization (COFT) in September 2021. So far, more than 56 crore tokens have been created, on which transactions worth more than Rs 5 lakh crore have been done.
New Delhi: Reserve Bank of India (RBI) has introduced new channels for card on file for tokenization. Now the Card on File Tokenization creation facility can be issued directly at the bank level. This will make it easier for card users and they will be able to link existing accounts with many e-commerce platforms.
RBI Governor Shaktikanta Das said that RBI launched Card on File Tokenization (COFT) in September 2021 and its implementation started from October 1, 2022. So far, more than 56 crore tokens have been created, on which transactions worth more than Rs 5 lakh crore have been done.
Tokenization has improved transaction safety and transaction approval rates. Currently Card on File (COF) tokens can only be generated through the merchant’s application or webpage. It is now proposed to start COF token creation facilities directly at the issuing bank level. This measure will enhance the convenience for cardholders to generate tokens and link them to their existing accounts with various ecommerce.
What is tokenization?
Tokenized card transactions are considered more secure as the actual card data is not shared with the merchant during the transaction process. Tokenization guidelines apply to both debit and credit cards and tokenization will have to be done for online purchases in future as per the customer’s preference. Tokenization refers to the replacement of physical or virtual card details with an alternative code called a ‘token’ used in online purchases. The customer can choose whether to tokenize his card or not.
Are card details safe after tokenization?
According to Bank of India, the actual card data, token and other relevant details are stored in safety mode through the authorized card network. The token requestor cannot store the primary account number (PAN), card number, or any other card details. The card network is also required to authenticate the token requestor for security that conforms to accepted standards.
How do I tokenize my card with an online merchant?
As per SBI Card website, you should follow the instructions of the online merchant and follow the registration and verification flow to register for tokenization and store the token with the online merchant. Typically this process will involve entering your card details, followed by verification via OTP and then a token linked to your card will be generated. This token will be stored with the online merchant.
