Over the past few months, the payment industry has been flooded with the term tokenization. Touted as the future of card-based payments, the sudden traction of tokens can be linked to the Reserve Bank of India’s mandate to adopt card-on-file (COF) tokenization as an alternative to card storage, whose The deadline for this is June 30, 2022. In a world where online fraud and cyber attacks continue to hinder the adoption of digital payments, tokenization is set to add an extra layer of security to users’ sensitive data, thus preventing online and digital data breaches. However, due to the novelty of the process, many card users are unaware of how card tokenization How to migrate all card payment flows to tokenization and how merchants and payment partners will be explored. We simplify the process and break down how it is set to disrupt the digital payments industry.

need for tokenization

Digital is currently one of the most convenient and preferred platforms to avail services and make purchases. Due to our increased frequency of transacting online, most of us are saving our payment information on merchant sites, which means that our payment partners have access to sensitive financial information that would otherwise be highly personal. To secure this data and protect not only customers but also merchants and banks, RBI is now prohibiting merchants from storing debit and credit card details on its servers after June 30, 2022. As a safer and more convenient alternative to card storage, RBI has mandated the adoption of tokenization through which one’s sensitive card information can be replaced with a non-sensitive uniquely generated code called ‘token’. could.

As a textbook definition, tokenization means replacing existing card details with a unique code called a token. The token request is then implemented by the cardholder through Additional Factor of Authentication (AFA). This algorithmically generated token protects sensitive information and prevents card fraud as it allows you to create
Payment without exposing your bank details. Currently, card tokenization is not mandatory and customers who do not tokenize their cards have to manually enter their card details every time they transact with effect from July 1, 2022.

Tokenization on your MasterCard

RBI’s move towards tokenization has focused on the need to create a strong and robust ecosystem where merchants and partners can easily migrate all card payment flows to tokenization. Along with several recognized card networks and issuing banks, Mastercard is also providing tokenization facility with a few simple steps. The brand, which has been working hard to bring its customers the best of security features in an increasingly digital-first world, has developed MasterCard Digital Enablement Service (MDES). The service allows payment credentials to be securely tokenized and stored on mobile devices. Therefore, if you are making purchases with your tokenized MasterCard debit or credit card, you will enjoy the same experience as regular card-based transactions with enhanced security and convenience. Even if the cardholder’s mobile device is lost, the card details are still secure as they are stored in the form of digital tokens. Tokens can be updated by the card issuer, allowing lost, expired or replaced cards to be updated automatically with the merchant. It simplifies the consumer experience and improves the success rate by reducing the number of failed transactions due to expiry of card details.


Benefits of tokenization on your MasterCard

Designed to combat large-scale online fraud and prevent digital payment breaches, tokenization comes with a number of benefits. some of them are:

• Enhanced safety and security: The tokens generated on your MasterCard will be unique to a single card at a specific merchant and will handle the overall security of performing card-based transactions. This eliminates the risk of storing card details online and ensures seamless convenience of storing your token details on the merchant site. Once your card is tokenized, you can only see the last four digits of your card, and if your card is changed, renewed, reissued, or upgraded, So you have to regenerate a token for transactions on merchant sites.
• Instant Checkout: Your tokenized MasterCard will also give you instant checkout as you will not need to punch out your card number for every purchase. Save your card once and you will be able to transact all the time.
• No more ‘false fall’: Many a times your legitimate online payment using your valid card is rejected on the basis of a transaction that looks like a fraud. With tokens, this becomes a thing of the past as the use of tokens for payments confirms the security of the highest order.
• Easy Card Management: With tokenization, you can also keep track of all your cards and the merchants they have been tokenized with.
• No need for physical card: With tokenization, you can store a virtual version of your card on your smartphone for days in case you forget to carry your wallet.
• Additional benefits: Tokenization on your MasterCard also comes with cashback benefits when you secure it on platforms like Amazon, PayTM, Swiggy, Flipkart and PhonePe.

Tokenize Your MasterCard

Go to the merchant site where you want to tokenize your MasterCard and follow these three simple steps:

Want to know more about tokenization? Watch this Mastercard video and choose the secure, tokenized route to digital transactions.

Designed on the principle of replacing the sensitive data on your credit and debit cards with unique identifiers, tokenization is a huge leap towards a safe and secure digital future. Tokenize your MasterCard and enjoy the unlimited convenience it is set to herald.