As per the announcement made by India’s central bank, the Reserve Bank of India (RBI), all debit and credit card data used for Point Of Sale (POS), digital, and in-app transactions had to be interchanged with unique tokens by the 30th of September, which is today. Tokenization adds extra security to the online payment process, enhancing the User Experience (UX).
Also Read: Statement Issued By The RBI And The Tokenization Procedure Has Been Covered In Our Previous Article, Tokenization Of Debit & Credit Cards: RBI Rolls Out New Rules
Considering that cardholders can use their cards with comfort and convenience for transactions in the times to come, some businesses, composed of online and offline retailers, store cards information such as the card number, expiration date, and more. This system increases the possibility of card details getting stolen and misused, despite how conducive it is. At the same time, even the security of retailers’ data storage has many times been violated.
The target date had previously been extended by about 3 months, starting in July, to give the sector additional time to prepare for managing tokenized payment transactions. On the 24th of June, around 19.5 Crore tokens were issued, according to the Reserve Bank of India (RBI). The addon was also made available to increase public awareness of the development and application of transactional tokens.
The method of replacing personal data with a distinct token from the company’s internal network is known as the tokenization of debit and credit cards. To provide a higher level of protection for businesses and clients, this token is used to gain access, reclaim, and maintain the client’s card data.
The central bank wants to make debit and credit cards more secure by tokenizing them. Tokenization will simplify transactions and quicken checkouts since no card punching will be required. Users will be able to store a digital copy of their card on their smartphones thanks to card tokenization, which eventually removes the need to have a physical card in hand.