Online credit and debit card rules to change from January 1; know how tokenization to impact transactions

At present, making online payments have become more common than carrying cash. Almost all day-to-day activities are being made with the use of online payments or credit and debit cards. As a result, the Reserve Bank of India (RBI) has instructed all merchants and payment gateways to erase sensitive customer information from debit and credit cards that is saved on their end in order to make online payments safer and secure.

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How will the use of credit and debit cards change from January 1?

It must be noted that the new debit and credit card rules will take effect on January 1, 2022, and the RBI has requested retailers and payment gateways to carry out transactions using encrypted tokens.

As per a release by the RBI on September 7, 2021,  as per the new laws, beginning in January 2022, when a customer will make the first payment to any merchant, he or she will be required to provide an additional element of verification (AFA). After that, the customer finishes the payment by entering the card's CVV and OTP.

What is tokenisation?

Tokenisation is the process of replacing an actual card number with a different code that will be converted into a token. For future online purchases, the tokenised card data can be used in place of an actual card number, as directed by the card user. Tokenised cards are safer to use to make payments and share with internet businesses than actual card numbers.

How to get the card tokenised? 

It must be noted that the card holder can get the card tokenised by initiating a request on the app provided by the token requestor. The token requestor will forward the request to the card network which, with the consent of the card issuer, will issue a token corresponding to the combination of the card, the token requestor, and the device.

It should be mentioned that tokenisation cards are applicable to Mobile Credit Cards for payments such as NFC enabled POS transactions, Bharat QR code based online or offline payments. Also included are all potential online and offline merchants.