InvestorQ : What is the Tokenisation implemented from 1st Jan22 by RBI?
Purvesh made post

What is the Tokenisation implemented from 1st Jan22 by RBI?

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Priyanka Singh answered.
2 years ago
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In September 2021, the Reserve Bank Of India prohibited the storage of customer card details by online sellers and merchants to avoid data breaches that may expose their personal financial information. However, there were no guidelines to implement the rules that may come into effect from 1st January 2022. Now, the RBI has released a detailed framework that sheds light on the concept of ‘Tokenisation’.

As per the new rules, online sellers and merchants will not be able to store the customers’ credit and debit card details, as they had previously done for easier checkouts in the future. Instead, the customer’s 16- digit card number and expiry date will be replaced by a token (unique code) to allow the payment to go through without storing the card details on the website. Under the process of ‘Tokenisation’, the online merchant will initiate a Tokenisation request to the card network with the customer’s consent.

The card network will then create a token as a proxy for the customer’s card and send it back to the online merchant. The customer will have to provide CVV and OTP for completing the payment. In the future, the website will save this generated token instead of the card details for ease in payments.

However, with the looming deadline, bankers and merchants have expressed their discomfort as they fear that they aren’t technically equipped for effectively undertaking the process of Tokenisation. Due to the industry-wise dissatisfaction, experts believe that the RBI may extend the deadline by 3-4 months. However, as of now, the RBI has not given a final ruling on the matter.
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divya Sing answered.
2 years ago
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As per the new guidelines, now the last date is extended to 31st July 2022.
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