According to reserve Bank of India ,reserve Bank of India), tokenization refers to the replacement of the actual card details with an optional code called “token”, which will be unique to the combination of the card, token requester and device.
A tokenized card transaction is considered secure as the actual card details are not shared with the merchant during transaction processing.
On card tokenization, Amara said, “It is a very good measure in terms of protecting consumer interests and ensuring against any data leakage.”
In June-end, the RBI extended the deadline for card-on-file (COF) tokenization by three months to September 30, based on various representations received from stakeholders.
Earlier its deadline was June 30.
Stakeholders had some issues related to the implementation of the framework with respect to guest checkout transactions among others. He also added that many of the transactions processed using the token are yet to gain traction across all categories of merchants.
“I think the universe of big merchants, which is a big part of the spend, has already been tokenized. It’s the smaller merchants that are doing it (in the process) right now,” Amara said.
The credit card issuer promoted by the country’s largest lender SBI also announced the launch of a new credit card specifically targeted for cashback rewards.
“The kind of trend we have seen among consumers is that instead of waiting patiently for reward points over time, they want it on an immediate basis.
“Now the demand is for instant cashback. Hence, seeing this trend, we are launching this credit card. It is the first of its kind in the industry. In terms of merchant availability, it is much wider than others. market,” the official said.
This card comes at no cost till March 2023. However, from the next financial year onwards, there will be an annual fee of Rs 999 which can also be a complete waiver if a customer crosses the spending limit of Rs 2 lakh per annum.
Amara said the company will acquire customers for this new card entirely on digital mode and customers can visit the company’s website to apply for the same.
On the demand front and consumer spending behaviour, Amara said industry volumes have been quite strong for the past five months. In July, it crossed the Rs 1 trillion mark which is a new benchmark for the industry.
This was primarily due to a strong revival in discretionary spending, particularly in sectors that were marginally lower. Domestic travel and hospitality, they have come back strongly and reached pre-COVID levels.
Amara said, “There is a strong trend in retail spending and other components such as commercial spending, where corporates can use it to make B2B payments to vendors, with some aggressive players that have increased this volume over time. ”