Card Tokenization : RBI
Tokenization will replace card details with a code, called a “token,” which will be specifically for the card, the token requestor and the device being used to pay.
- Instead of the card’s details, the token will act as the card at point of sale (POS) terminals and quick response (QR) code payment systems.
- The goal of the process is to improve the safety and security of payments.
- The Reserve Bank of India’s plans to move towards card tokenization is likely to hit a wide range of companies from major e-commerce firms and food delivery firms to lenders, while increasing the use of cash.
- RBI issued guidelines in March 2020 saying that merchants will not be allowed to save card information on their websites to boost data security.
- It issued fresh guidelines in September 2021 giving companies until the end of the year to comply with the regulations and offering them the option to tokenize.