TR Ramachandran, Group Country Manager, India and South Asia, Visa, said, “This will be critical in building consumer trust on merchant platforms and assuring them to protect their payment credentials on these platforms. We have extended this to all our banking partners. tokenization and continue to work closely with merchants, payment aggregators and gateways to prepare the ecosystem for the COF tokenization rollout.”
What is tokenization?
Tokenization is the process of replacing a 16-digit payment card account number with a unique digital identifier known as a ‘token’ for mobile and online transactions. This token then allows the payment to be processed without providing the cardholder’s account details.
According to RBI’s FAQs, “Tokenization refers to the replacement of the actual card details with an alternate code called “token”, which will be unique to the combination of the card, the token requester (i.e. the entity that receives the token from the customer). Accepts the request for) a Card and sends it over the Card network to issue the corresponding token) and the Device (hereinafter referred to as the “Identity Device”).
benefits of tokens
The central bank’s FAQ states that tokenized card transactions are considered secure as the actual card details are not shared with the merchant during transaction processing.
RBI’s COF tokenization guidelines, issued in August, mandate the replacement of actual card data with encrypted digital tokens, which are then used to facilitate and authenticate transactions. “This devaluation of sensitive card details reduces the risk and vulnerability of sensitive data, as only tokens are present in transit in the ‘in-rest’ and ‘in-use’ phases. Ecommerce is expected to enhance consumer confidence in payments, ensuring a seamless transaction experience as well as allowing card issuers to authorize a higher number of transactions,” Visa said in the release.
RBI’s consent for card-on-file token by card network for transactions on mobile phones, tablets, laptops/desktops, wearables, IoT devices etc. is aimed at making card-based digital payments more secure and frictionless. “These new guidelines come at a time when Indian consumers continue to adopt digital payment methods for daily and discretionary needs,” Visa press release said. The transaction ensures the experience.” .
Through a press release dated September 7, 2021, RBI said, “It may be noted that the introduction of COFT, while improving customer data security, will provide the same convenience to the customers as now. Expressed in certain sections Contrary to some of the concerns raised, according to the media, there will be no need to input card details for each transaction under the token arrangement. Reserve Bank’s efforts to deepen digital payments in India and make such payments secure and efficient continue Will stay.”