Today is the deadline for RBI’s tokenization of debit, credit cards: What does it mean?

Given the ease and comfort of cardholders for future transactions, many organisations, including shops, both online and offline, retain card data like card number, expiration date etc. Although this method is convenient, it also raises the risk of card information being stolen or abused. There have even been occasions where retailers’ storage of such information has been compromised.

Also Read: What is credit and debit card tokenization? Why is it the need of the hour?

In order to provide the industry more time to prepare all stakeholders for handling tokenized transactions, the deadline was extended by three months beginning in July. The RBI reported that 19.5 crore tokens were created on June 24. Additionally, the extension was offered in order to raise public knowledge of the creation and use of tokens for transactional purposes.

What is credit and debit card tokenization?

Tokenization of credit and debit cards is the process of swapping out sensitive data with a token, or a randomly-generated unique placeholder, from the business’s internal network. This token is utilised to get access to, retrieve and maintain a client’s credit and debit card information in order to offer a higher level of security for both the customer and the business.

What is the benefit of tokenization?

The RBI seeks to increase security by tokenizing cards. Card tokenization will facilitate transactions and speed up checkouts because the card won’t need to be punched in for any purchases. Card tokenization enables users to store a digital replica of their card on their smartphone. Therefore, carrying a physical card is not necessary.

How to do tokenization?

The cardholder can request the tokenization of their card through the token requestor’s app. A token corresponding to the combination of the card, the token requestor, and the device will be issued by the card network when the token requestor has forwarded the request to it and the card issuer has given their approval. The customer is not required to pay any fees in order to use this service.

Is tokenization mandatory?

Tokenization is not mandatory. It is your choice to allow tokenization of your card. Those who don’t want to create a token can carry on with their transaction as usual by manually entering their card information.

(With ANI inputs)