In a letter to RBI, MPAI said, “We humbly request that the RBI may share a status report with the card networks, payment aggregators and payment gateways to demonstrate their readiness to complete token transactions across all use cases.” makes it mandatory.” “We also request that the RBI takes necessary action to ensure that token flow issues for recurring payments are duly addressed before the ecosystem is required to implement the no-card-storage rule ”
ET has seen a copy of the letter addressed to the central bank. tokenization It is a process by which card details are replaced with a unique code or token, allowing online purchases to be made without exposing sensitive card details. According to the central bank’s rules, all merchants will have to delete the customer’s debit and credit card details and replace the card payment with a unique token before October 1. Traders are meeting on Monday, and will likely request a postponement of this deadline.
Traders have warned that implementing the token without adequate preparation will result in major disruption to recurring payments, as seen in October last year when the mandate was first introduced. “As merchants, we do not know whether the upstream partner is ready. While we have been given verbal assurances by our partners, we have not received any sample transactions nor have we been able to test it on our platform,” said one of the traders involved in the discussion. “We fear the recurring piece will once again face massive disruption.”
third expansion
The RBI in July said it would not extend the deadline for storing card data and directed all stakeholders except card issuers and card networks to purge customer data before October 1, 2022.
This is the third such extension in the last 18 months. As an interim measure, the central bank allowed merchants and payment aggregators to store cards-on-file (COF) for guest checkout transactions only with a maximum transaction date and for four days.
It also said that any non-compliance would be considered for punitive action including imposition of trade sanctions. While banks and other industry participants say they are fully prepared, traders have submitted to the central bank that recurring payments are still a challenging exercise due to the multiple phases involved.
difficult process
Such payments require creating a mandate for the token card, and then migrating this mandate to the token. Experts say that even the third step of ensuring periodic autodebit on the relevant account based on the combination of mandate ID and token is a cumbersome process.
“We note that our members who are completely dependent on payment aggregators have not had any testing experience on the above three elements till date,” the letter to RBI said. “Members who are still able to test have only limited visibility on the efficacy of recurring payment flows due to their lean upstream readiness. Access to Bank Identification Number (BIN) is required. Progress on this front is also limited.” It also said that punitive action, including imposition of