Debit- Credit Card: If you transact through debit or credit card on any e-commerce website, payment gateway or any shop, then this news is for you.
Debit- Credit Card: If you transact through debit or credit card on any e-commerce website, payment gateway or any shop, then this news is for you. Soon you will also be able to generate the code through your bank as part of the tokenization process. Till now this facility was provided only with merchants. If you understand in simple language, tokenization of your credit or debit card will not happen at any e-commerce, shop or payment gateway but directly at the level of the card issuing bank.
RBI Governor gave indications
Reserve Bank Governor Shaktikanta Das has said that in view of the increasing acceptance and benefits of tokenization of card data, RBI is now also considering starting Card-on-File Tokenization (CoFT) manufacturing facilities at the bank level. Instructions in this regard will be issued separately.
What is tokenization
Under the tokenization process, a unique code is generated to facilitate transactions through the card. This code is of 16 digits and after it is generated, you will not need to share other card information. Suppose you have shopped on an e-commerce website and want to make payment by card. Generally, for payment you need to enter details like card expiry date, CVC. However, all these details are not required in the tokenization process. Only 16 digit code is sufficient for payment. This means that the customer’s card information will no longer be available at any merchant, payment gateway or third party from where you are making the transaction. This will protect your data and protect you from cyber fraud. Please note that this code has to be generated every time there is a transaction.
Demand is increasing
The Central Reserve Bank introduced Card-on-File Tokenization (CoFT) in September 2021 and it was implemented on October 1, 2022. More than 56 crore tokens have been minted so far, on which transactions worth more than ₹5 lakh crore have been done.