Card tokenisation rules | Fusion - WeRIndia

The Reserve Bank of India (RBI) introduced tokenisation rules for debit and credit cards to enhance security. These rules will come into force from July 1.

With these new rules, payment aggregators, merchants, and payment gateways have to remove the card details of customers from their servers. They should not store the card details of customers. Instead of that, they have to apply for tokenisation. The deadline for this process is June 30.

The tokenisation facilitates payments through cards by generating a unique alternate code. Under this process, a token will be initiated as an alternative to the card number of a customer.

Currently, customers’ card details are stored in the servers of payment gateways and merchants for recurring transactions with their permission.

But, with tokenisation, there is no need of saving customers’ card details. For recurring transactions, customers can ask merchants for tokenisation of their cards and approve it. The explicit consent of customers is essential for the initiation of tokenisation.

To create a token for a card, merchants need to send a request for tokenisation to the card network. They can save this token for future and recurring transactions.

However, customers should approve the transaction by entering their card CVV and OTP, as they are doing at present. Customers can generate tokens for any of their cards using the same procedure.

Using tokenisation for their debit or credit card is not mandatory. Customers can choose it as per their choice. If they decide not to use tokenisation, they need to re-enter all card details while paying with them or using them online.

As card details of customers are not shared with merchants while processing the payment, tokenisation is considered safe. Merchants can only store the last four digits of the card number and the name of the card issuer. Thus, tokenisation improves security standards.

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