The Reserve Bank of India (RBI) has mandated usage of encrypted tokens for all merchants, carrying out any kind of online transactions. However, this rule, which was to come to effect from 1 January has been changed to 1 July 2022.
What is it? How does it affect you? Here is all you need to know:
What is tokenisation?
Tokenisation of debit/credit cards will create a token which will act as a replacement for the 16-digit card number.
Through this process the cardholders will give permission to a particular merchant/company (like Swiggy, Netflix, etc.) to create a token for further online transaction with them.
The company/merchant will then send the tokenisation request to card network, after approval of which a unique token will be created.
Why is the date postponed?
In a circular issued on 23 December, RBI postponed the date for tokenisation, after receiving several requests from Indian Banks Association and other banks.
Will I not be able to use my credit/debit card if I do not tokenise them?
You will still be able to use your credit/debit card even if you do not tokenise them.
However, if you do not tokenise them, you will have to enter your complete credit/debit card details, each time you wish to carry an online transaction.
Can I use the same token for every company (Swiggy, Netflix, etc)?
No, each merchant or company will have to generate a unique token for online transactions.
Therefore, the tokenisation process should be carried out separately for each company/merchant.
Why should I tokenise?
According to the RBI, the benefits of tokenisation are:
It will reduce the risk of online fraud.
The transactions will be easier after the initial process.
More privacy as no one in the transaction chain can store your card data.
Is tokenisation valid for international transactions?
For now, tokenisation is not valid for international transactions, meaning, only domestic transactions come under this rule.
How do I tokenise my cards and make payments thereafter?
You can follow these steps to tokenise your card and make payments thereafter:
While checking out with online payment, press the “opt for tokenisation” option after entering your credit/debit card details.
This request will be forwarded to the bank or card network by the company/merchant,
Your card will then be tokenised.
Next time during any online transaction with the company/merchant you just need to select the saved token.
After this, you’ll see the last four digits of your card.
Enter the CVV to complete the process of transaction.
Is the tokenisation process free of cost?
Yes, tokenisation is entirely free of cost.
How do I manage my tokenised cards?
If you use multiple cards for online transactions, you might think how to manage so many token numbers. However, according to MoneyControl, it is nothing to worry about since, your respective banks will provide a special portal on its own website to manage your tokens.
(With inputs from India Today and Money Control)