The Reserve Bank of India (RBI) has extended the deadline for the tokenisation of credit and debit cards by another three months to September 30, 2022. On Friday in a press release, RBI mentioned that ‘to avoid disruption and inconvenience to cardholders’ it has decided to take this step.
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“This extended time period may be utilised by the industry for, (a) facilitating all stakeholders to be ready for handling tokenised transactions; (b) processing transactions based on tokens; (c) implementing an alternate mechanism(s) to handle all post-transaction activities (including chargeback handling and settlement) related to guest checkout transactions, that currently involve /require storage of CoF data by entities other than card issuers and card networks; and (d) creating public awareness about the process of creating tokens and using them to undertake transactions,” the regulator said.
RBI while encouraging cardholders to tokenise their cards for their own safety mentioned that the process of tokenisation has been going well. Till date, a total of 19.5 crore tokens have been created. Cardholders can opt to create tokens if they wish. The option of entering card details manually at the time of transaction is available to those who do not wish to create a token.
A number of entities, including merchants in an online payment chain, store card data like card numbers and expiration dates - Card-on-File (CoF) - citing convenience and comfort to cardholders. While this practice does render convenience, the availability of card details with multiple entities increases the risk of card data being stolen or misused.
“There have been instances where such data stored by merchants have been compromised. Given the fact that many jurisdictions do not mandate Additional Factor of Authentication (AFA) for authenticating card transactions, stolen data in the hands of fraudsters may result in unauthorised transactions and resultant monetary loss to cardholders,” the RBI said
Through tokenisation, card details are replaced by a unique code or token, allowing online purchases to proceed without revealing sensitive card information, the RBI said.
(Edited by : Priyanka Deshpande)
First Published: Jun 26, 2022 1:04 PM IST
