RBI New Rules: Debit and credit card rules to change from October 1 – RBI in its guidelines has stated that tokenized card transactions are secure as the actual card details are not shared with the merchant during transaction processing.
The Reserve Bank of India’s (RBI) card-on-file (CoF) token rules will come into effect from October 1, 2023. According to RBI, the new tokenization method will make payments easier, safer and easier for the cardholders. more convenient.
As the card token rules as directed by RBI are set to kick-in from October, State Bank of India on Thursday said that it has prepared the ground to move towards card tokenization. Ram Mohan Rao Amara, MD & CEO, SBI Cards and Payment Services (SBI) said, “In terms of our readiness, readiness, technology, in terms of integration with all networks, we are all across the board like Visa, MasterCard and RuPay. The network is ready.” Card) told PTI on Thursday.
According to the Reserve Bank of India (RBI), 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, token requester and device.
RBI guidelines state that tokenized card transactions are secure as the actual card details are not shared with the merchant during transaction processing.
The RBI also said that, in order to facilitate transactions, the credit card and debit card information of the consumers—used for online, point-of-sale and in-app purchases—should be implemented post-implementation. encrypted” token. tokenization criteria. The deadline for the new token regulations was originally set for July 1, but has been extended to September 30.
How to generate token for debit, credit card
- Enter credit or debit card details along with additional details when you checkout and transact on an e-commerce website or application
- Secure the card and tokenize it by selecting the option ‘Secure your card as per RBI guidelines‘ or ‘Secure your card‘ as per latest RBI guidelines.
- Authorize the creation of the token using the one-time password (OTP) provided by the bank sent to the registered mobile phone or email to complete the transaction.
- After creating a token, the data on one’s card will be replaced with the token mentioned above.
- To help identify your card while transacting, the last four digits of the saved card will be displayed when they revisit the same website or application for any future transactions, indicating that the card has been tokenized. has been done.
What is Tokenization?
As part of the RBI’s tokenization scheme, all businesses are expected to remove all existing information on the card and replace it with a special “token”. Once the policy is implemented, merchants will not be allowed to keep customer’s card information, as RBI claims that doing so will prevent misuse of the card and enhance the security of online transactions.
Benefits of Tokenization
RBI has said that a number of entities – including e-commerce, merchant stores, websites and applications – are involved in the credit/debit card payment transaction chain, which saves the card details of users.
It is also interesting to note that some merchants also require customers to save card information before using their services or downloading their apps, increasing the risk of users’ personal information being stolen.
Tokenization seeks to prohibit such fraud as merchant entities will not have access to actual cardholder information; Instead, they will only have a special, randomly generated token code.
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Tokenization Fees and Charges
According to RBI, credit/debit card users are not required to use the token system. If the cardholder chooses not to use the tokenization mechanism, they will be required to manually enter their credit or debit card information every time they make a purchase on an e-commerce or merchant website. Additionally, according to the RBI, an individual would need to develop unique tokens for each of their cards.