New debit, credit card rules kick in with Tokenisation

The rules and regulations for online payments for debit and credit cards have been changed. The Reserve Bank of India’s (RBI) card-on-file (CoF) tokenization norms came into effect on 1st October 2022. RBI’s CoF tokenization aims to improve the payment experience of cardholders.

The new rule released by RBI says that neither businesses nor payment aggregators can save customer card details on their platforms. The card details can only be saved by card networks or issuing banks.

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Benefits of Tokenisation

• Tokenisation has replaced sensitive card information including card number, and card expiry with cryptographically-generated random strings.
• Once the card is Tokenised, the generated card token can be used for processing payments as a substitute for card details.
• The Tokenised card eliminates the risk of loss of sensitive card information.

Impact of Tokenisation

• The impact of Tokenisation on customers is minimal.
• The customers are only required to enter their card details the first time for issuance of a token.
• After that, the merchant will trigger the tokenization process at no cost or effort to the customer.