The Reserve Bank of India (RBI) is all set to implement the new card payment rules from the beginning of 2022. The new rules have been setup to ensure card data safety of the customers.
RBI, in March 2020, announced that merchants and payment gateways will not be allowed to save card data of customers on their websites. Further in September 2021, the central bank notified the merchants to remove the card information of customers on their websites and adhere to the guidelines by 01 January 2022. RBI has offered the option of tokenisation to merchants to carry forward the transactions.
What is Tokenisation?
According to the official website of RBI, "Tokenisation refers to replacement of actual card details with an alternate code called the “token”, which shall be unique for a combination of card, token requestor (i.e. the entity which accepts request from the customer for tokenisation of a card and passes it on to the card network to issue a corresponding token) and device."
RBI wants to move towards tokenised card transactions because it is considered safer as the actual card details are not shared with the merchant during transaction processing.
According to a report by news agency Reuters, Credit Card transactions crossed $13.13 billion in October 2021 in India.
However, the new guidelines can decrease the number of card transactions.
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