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26 Jun, 2022
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Credit Card, Debit Card New Rule: Merchants To Not Store Customer Data Anymore!

The Reserve Bank of India made a statement that the payment ecosystem in India is prepared to adopt the tokenisation rule from July 1 to a large extent. The RBI made this comment earlier this month after the deadline had extended to tokenise debit cards and credit cards from January 1 to July 1. After the credit card tokenisation and debit card tokenisation rule gets implemented across the country, domestic online merchants will not be allowed to store customer data on their servers. According to RBI, this is being done to protect customer privacy.

What Is Card Tokenisation?

RBI’s website says: ‘Tokenisation refers to the 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 the request from the customer for tokenisation of a card and passes it on to the card network to issue a corresponding token) and device (referred hereafter as identified device).’

This token will not contain any personal information that can be directly accessed and keeps changing making it the most secure method to complete payments, says India’s largest public sector bank State, the Bank of India on its official website. This is card tokenisation meaning.

 

Once the  card tokenisation service is done, payment aggregators, wallets, and online merchants will not be able to store your card data including debit or credit card number, CVV, card expiration date, and other sensitive information. Banks and online merchants have been sending alerts to their customers already to tokenise debit or credit cards as per the new rules for debit and credit card. 

What Will Happen If You Do Not Tokenise Your Credit/Debit Card Before 1st July

Till now, you would have received notifications from online merchants and banks to ‘tokenise’ your cards for carrying out payments without any problem. However, the process is not obligatory. If you do not tokenise your card by July 1, you will have to re-enter all card details while purchasing anything online. This is because existing data will be deleted from the server as per the new rules for online transaction.

What Are The Benefits Of Tokenisation?

Tokenising Debit cards and credit cards makes sure that online transactions are more secure as there will be no data of the customer stored on the merchants’ website or mobile application. The RBI website says that a tokenised card transaction is considered safer as the actual card details are not shared/ stored with the merchants to perform the transaction. 

The customer will experience faster and smoother checkouts since card details including 16-digit card number, name on card, and its expiry date will not be required to enter with tokenised cards. However, CVV and OTP authentication requirements will continue to be in place as an added layer of protection for customers, including those who have provided consent to debit card and credit card tokenisation.

How To Tokenise Your Credit/Debit Cards? 

You can directly go to the relevant merchant’s or bank’s website and tokenise your credit/debit cards. You can simply opt for tokenisation and save your card details. Don’t worry, after you have opted for tokenisation, the website will automatically generate a token against your card details and save it for future use. 

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