What is RBI Tokenization ? How can You Tokenize Your Credit & Debit Cards as per RBI Guidelines

What is RBI Tokenization –  The Reserve Bank of India (RBI) permitted card networks to tokenize card transactions in 2019 as the usage of digital payments has grown, allowing them to continue improving the security and safety of card transactions. The process of replacing original card information with a unique code called a “token” that is distinct and provides additional security for customer credit card information is known as tokenization. Tokenized card transactions are thought to be safer since the merchant does not get the actual card data during transaction processing. The RBI stated on Friday that the effective execution of tokenization of card-based payments will not be postponed until October 1. No online merchants or payment gateways will be able to save any customer credit card data on their digital platform as a consequence of the announcement.

Since we couldn’t go outside, we became reliant on online services, which has grown significantly since the Corona period. Today, Debit and Credit cards are the most popular payment methods, and fraud cases have likewise risen in tandem with the rise of online payments. To prevent these frauds, the RBI has requested that all credit and debit card data be merged online, in-store, and in-app transactions into one unique token.

What is RBI Tokenization ?

Credit card and debit card holders in India may soon enjoy big news. The payment rules will actually change on October 1, 2022. From October 1, 2022, the Reserve Bank of India (RBI) will implement the Card-on-File Tokenization/CoF Card Tokenization rule. In fact, the RBI tokenization system will be very beneficial for consumers. As a result, the users’ payment experience will improve, while at the same time making transactions with credit and debit cards more secure than before.

First and foremost, tokenization refers to the fact that your bank (debit or credit) data, such as a 16-digit number, name, expiration date, and code were previously saved. They’ll be substituted with a token as a result. For the transaction, your merchant website will use the token. The card number and your name are immediately shown on the website whenever you place an order over the internet, thus making it easier to shop.

What is RBI Tokenization ?

What is RBI Tokenization Details

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What is RBI Tokenization?

First and foremost, tokenization refers to the fact that your card (debit or credit) information, such as a 16-digit number, name, expiration date, and code has previously been saved. A token will be used to replace them. For the transaction, your merchant website will use the token. The card information you provide when you place an online order is instantly visible on the website, along with the card number and your name.

The transaction is finished after you enter CVV, but it no longer functions once you fill out the OTP. All firms, including Swiggy, Amazon, Myntra, Flipkart, and Zomato are requested to delete any data concerning the consumer’s card number, CVV code, and expiration date starting October 1st 2022.

What are the benefits of tokenization?

Several firms connected to the card payment transaction chain store real card data (also known as card-on-file or CoF) of consumers, according to the central bank. Merchants do, in fact, force customers to store card information. The risk of card data being stolen is considerably higher when such information is readily available to a large number of merchants. Card data held by certain merchants has been compromised/leaked in the past, resulting in incidents. The merchant sites will only have an alternate code, one that is distinct and randomly generated rather than the original cardholder data, which will put a stop to this. Frauds conducted via social engineering methods can also utilize stolen card data to perpetrate fraud throughout India.

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Benefits of Card Tokenization

  • Reserve Bank of India is implementing these norms to secure the card information of the customers.
  • Currently, the bank card information is saved by the merchant during a single transaction. In such a situation, if the website of the merchant is hacked, then the information of the customers is also not safe. But with card tokenization, the data of all the customers will be with the bank and not with the merchant website.
  • Tokenization will also save you the hassle of entering your card details every time.
  • The customer will not have to remember the token number as it will remain with the merchant, in a way it will be the confidential code of your card.
  • After cyber fraud, now banks around the world are protecting card data. So your token will be different at each merchant or e-commerce portal by this the risk of theft of card details will be reduced.

What is Tokenization of debit and credit cards?

Tokenization is a process of turning a physical object, such as a debit or credit card, into a digital token. This helps merchants and payment processors to process card payments more quickly and securely. By digitizing the cards, they’re also able to track spending in real time, which can help reduce fraud. As the world moves towards more secure and automated transactions, tokenization is an essential step in making that happen.

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How Do I Create A Token For My Card?

For each card, the cardholder must go through a one-time registration procedure by providing details and agreeing to create a token during checkout at each online retailer’s site. On a single website, a token is generated for each card. For a new card and/or website, you’ll have to go through this process.

  •  Visit any e-commerce/merchant website to make a purchase and start a transaction
  •  During the check-out, select your preferred bank’s credit/debit card as payment method and enter all details
  • Select the option to “secure your card” or “save card as per RBI guidelines”
  •  Fill in the OTP sent on your mobile or email by the card company and finish the transaction
  • Your token has been generated and saved instead of your actual card details

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How to Generate Token For Tokenization Online?

The Reserve Bank of India (RBI) is set to implement its card-on-file tokenization norms from next month i.e. 1 October 2022, in view of complaints related to misuse of debit or credit cards. This is being implemented in view of the increasing incidents of misuse of debit or credit cards.

  • When you visit an e-commerce website or any app to make a payment, you will have to fill the details of the card from which you have to make the payment.
  • Then you have to secure the card. For this, to tokenize your card as per RBI instructions, you have to select the option ‘RBI Guidelines on Secure Your Card’.
  • After that you have to press on the OK option of creation. To complete this process, OTP will come on your phone and on the email linked to the bank, which you will have to enter again.
  • Then your token will be created. In this your card data will be saved in a token.
  • The next time you make a payment on the an e-commerce or app again, only the last four digits of your card number will be visible to identify your card.
  • So in this way the data of your card will be saved in the form of a token and it will also be secure. With this you will be able to make payments easily.

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