The policy for online payments will change for customers using credit or debit cards starting in October 2022 if they have not completed the tokenization process by the end of Sept 2022. Users will have to manually enter their card details whenever they make a digital transaction from 1st of October, 2022 onwards.

The RBI’s Tokenize debit and credits cards initiative requires payment processors and merchants to remove all credit and debit cards information and replace it with tokens. RBI found that tokeinzed transactions were not accepted by all merchants types with concerns regarding guest checkout transactions.

The Reserve bank of India’s (RBI) recent legislation stipulates that by September 30, 2022, all debit and credit card transactions shall be tokenized, which is an essential milestone for debit and credit card holders. With tokenization, existing card details are replaced with a unique code called a token, and processing of a tokenization request is performed by the cardholder through another form of authentication.

As a result of this move by RBI, your credit card credentials will be secured; however, if you fail to sign-up for the tokenization system by the end of the month, you will have to enter your card details manually whenever you make a digital transaction from october onward.

What is Card Tokenization in 2022?

The tokenized cards will protect against fraud by replacing the actual debit and credit card details with a token while merchants share the card details. As of July 2022, every token requestor and merchant will receive a unique token when conducting digital transactions. In Easebuzz’s definition of card tokenization, tokenization involves replacing the actual or apparent card number with an alternate code, known as a “token.”

There shall be a unique code for each combination of cards, token requestor (i.e., the entity that accepts requests from customers and passes them along to the card network to issue a token) and merchant (token requestor may or may not be the same entity).

What are the security advantages of tokenizing your credit card information?

Tokenization replaces the old practices of cardholders saving their details on the merchant’s website by manually entering them. The approach saves time for cardholders as they are reserved for future use so that they will not be required to enter them manually. As a result, card credentials have been stolen by fraudulent entities, and ultimately the cardholder is a victim who loses money. A challenge faced by fraudsters and escalating credit and debit card scams have led the RBI to implement Tokenization- Card Transactions, which no longer store confidential card details over the internet.

For instance, about the security and safety of its tokenization system, Easebuzz says, “The actual card number, token, and other relevant data are stored in a secured mode by the authorized card networks. Token requestors cannot store any sensitive information, such as the debit and credit card number, and any password associated with the token.”. Token requestors are also required to get certified for safety and security that confirms to international best pratices.

There are several advantages to tokenizing credit cards

  1. The very first benefit is card tokenization is optional. Customers can choose to have their card tokenized. If they do not want to, they will need to enter all card details each time they make online transactions.
  2. Tokenization will increase card security by making each card uniquely identifiable at each merchant; every cardholder should consider mobile tokenization if they are concerned about the risk of fraud.
  3. The tokenized cards are free of charge, and cardholders may use any authorized card to complete transactions.
  4. Tokenized cards can only be viewed on the merchant portal, and a token must be created every time the card is changed, renewed, reissued, or upgraded so the customer can visit the merchant website.
  5. Card holders using multiple cards will be provided with a portal to manage tokenized cards. Through this portal, cardholders can view/delete the tokens associated with the respective cards.
  6. To request tokenized card management, customers can call the Phone Banking Service. Tokenized card handling and card safety, choosing to move your card before the deadline won’t affect your ability to use it safely for online transactions. It will also protect your card details from being misused.

What are the methods for implementing card tokenization?

  1. Currently, tokenization can only be conducted in India by recognized payment networks such as Visa/Mastercard/Amex/Rupay and issuing banks.
  2. The cardholders can do tokenization the card by soliciting it on a merchant’s portal, which accepts customer requests for tokenization and forwards it to the card network, the card network, or the issuing bank.
  3. Tokenized cards can be used successfully to conduct domestic credit or debit card transactions after your card issuing bank approves your token request, according to the card, the token requestor, and the merchant.
  4. Tokenization requests are only registered after receiving explicit customer consent through additional factor authentication (AFA), and not by requiring a checkbox to be selected automatically or by default.

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