Despite demands from small traders to delay compliance dateThere has so far been no indication by the central bank that the deadline is likely to be extended, three banking and merchant sources with knowledge of the matter told Reuters.
reserve Bank of India ,reserve Bank of India) did not respond to an email request for comment.
“The common sense is that banks, card networks and (large) merchants are better prepared and hence the push from the ecosystem for expansion is also not massive and we have found no indication to suggest expansion ,” What was said. A banker with a large state-owned bank.
“If that happens, it will be surprising,” he said.
Three years ago, India started a massive exercise to secure card data based on the need of businesses token card till 30 September.
Tokenization is a process by which card details are replaced by a unique code or token, which is generated by an algorithm that allows online purchases without exposing card details to improve data security.
RBI first introduced the norms in 2019 and after several extensions ordered all companies in India to purge their system saved credit and debit card data by October 1, 2022.
While banks, card companies and large retailers are ready, smaller merchants may face trouble, which they say could result in revenue loss for them in the short term.
Merchant associations have also reached out to the central bank to see if they can be given more time.
Some merchants and bankers also fear that card-related transactions may drop in the short term once the tokenization norms are implemented.
“The moment an additional layer or friction is introduced, the payoff starts decreasing. And there are concerns that we may see a recurring decline from the same level that we saw initially,” said Rohit Kumar, founding partner of the company. TQH ConsultingA public policy consulting firm.
According to traders, when the previous tokenization deadline was near, recurring payments were failing 10-15%.
Besides payments, other things that require stress testing include what happens when a product is returned and other post-transaction flows will not be stored on merchant servers as card data, K Rajaram Suresh said Boston Consulting Group,
Suresh said that unlike India, where it has been made mandatory, European stakeholders have been encouraged to tokenize the card for security benefits.
However, analysts argue that tokenization is inevitable at a time when digital payments are expected to reach $10 trillion by 2026. According to central bank data, card or internet transactions related frauds are on the rise and account for 34.6% of total fraud cases in FY2011.
Jagdish Kumar Senior Vice President said, “People are used to one-click checkout, so adoption may take longer and some may shift to cash, but noting that it makes online transactions more Makes it safer, customers will adopt it faster this time without too much chaos.” President of worldline india,