The Reserve Bank of India (RBI) has introduced new channels for card on file for tokenisation. Now it will be issued at bank-level to enhance convenience to create tokens created and linked to their existing accounts with various e-commerce applications.
According to the RBI Governer’s Statement on Developmental and Regulatory Policies, “RBI introduced Card-on-File Tokenisation (CoFT) in September 2021 and began implementation from October 1, 2022. So far, over 56 crore tokens have been created on which transactions with value of over Rs 5 lakh crore have been undertaken. Tokenisation has improved transaction security and transaction approval rate. At present, Card-on-File(CoF) token can only be created through merchant’s application or webpage. It is now proposed to introduce CoF token creation facilities directly at the issuer bank level. This measure will enhance convenience for cardholders to get tokens created and linked to their existing accounts with various ecommerce applications. Instructions in this regard will be issued separately.”
“With the introduction of new channels for Card-On-File (CoF) tokenisation, the volume of tokenised transactions will accelerate rapidly while enhancing convenience for cardholders. Until now, the cardholders had to create different tokens through each merchant’s application or webpage. This would require time and effort from the users. Going forward, tokens will be created at the issuer bank level and linked to their existing accounts with various e-commerce applications. This will eliminate the duplication of tokenisation process at each app or website along with increased transaction security, resulting in reduced card-data-related frauds. This strategic move aligns with the evolving landscape of digital payments, ensuring a safer and more user-friendly ecosystem for consumers and merchants alike,” said Mandar Agashe, Founder & Managing Director at Sarvatra Technologies.
What is tokenisation?
A tokenised card transaction is regarded safer because the real card data are not shared with the merchant during transaction processing. Tokenization guidelines applicable to both debit and credit card and have to be tokenized for future online purchase as opted by customers.
Tokenisation refers to replacement of actual or clear card details with an alternate code called the “token” used in online purchase. This shall be unique for a combination of card, token requestor and the merchant.
A customer can choose whether or not to let his, her card tokenised.
Are the customer card details safe after tokenisation?
According to the Bank of India FAQs, “Actual card data, token and other relevant details are stored in a secure mode by the authorised card networks. Token requestor cannot store Primary Account Number (PAN), i.e., card number, or any other card detail. Card networks are also mandated to get the token requestor certified for safety and security that conform to international best practices / globally accepted standards.”
Is the tokenization applicable for International Card on file transactions?
No, Tokenization is applicable only for domestic transactions.
How do I tokenize my card with an online Merchant?
According to the SBI Card website, You should follow the instructions specified by the online Merchant and follow the registration and verification flow in order to register for tokenization and store the token with the online Merchant. Generally, the process would entail filing your card details, followed by verification via OTP and then a token will be generated associated with your card. This token will be saved by the online Merchant.
What is the limit on the number of cards to get tokenised? Can a customer get all their cards tokenised if they have more than one?
A customer can request for any number of cards to get tokenised; there’s no limit on the maximum number of cards. While making a transaction, a customer can use any of the tokenised card details taken from the token requestor app. For every combination of card and merchant, a unique token is generated each time. A customer is free to use any of the existing cards or a new credit card registered with the token requestor app.
Source By: economictimes
