The Reserve Bank of India (RBI) today extended the deadline for card tokenisation till June 30, 2022. In a circular to all payment system operators announcing the extension, the central bank said after the deadline, "all card-data-on-file (CoF) data shall be purged".
The RBI further said in the circular that industry stakeholders are at liberty to pursue any alternatives to tokenisation to handle any use case -- recurring e-mandates, equated monthly instalments, et al -- or post-transaction activity, such as chargeback handling, dispute resolution, reward / loyalty programmes, which currently requires storing CoF by entities other than card issuers and card networks.
The earlier deadline set by the RBI was set to expire on December 31, 2021. In the weeks leading up to the deadline, the RBI is said to have reached out to banks to check their readiness.
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Earlier, an industrial lobby had urged the RBI to extend the tokenisation deadline. Tokenisation converts the card details to a unique code or token, which will forbid all online shopping portals from saving customers' card details.
Customers can either make and save the token on respective shopping portal for future use
How does card tokenisation work?
While checking out from the portal, customers should enter the card details and opt for tokenisation.
A token will be generated by the respective bank and saved by the merchant for further purchases. One token is limited to one card and online shopping portal. Users can tokenise the same card with multiple merchants.
Card tokenisation is a free service and can be availed by anyone. As of now, it is applicable only to the domestic cards. If customers renew or replace the existing card, they have to generate a new token. A tokenised card transaction is considered safer as the card details are not shared with the merchant during transaction processing.
(Edited by : Vijay Anand)
First Published: Dec 23, 2021 8:36 PM IST
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