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RBI extends card tokenisation deadline by 6 months

  • Posted By
    10Pointer
  • Categories
    Economy
  • Published
    25th Dec, 2021

The Reserve Bank of India extended the card-on-file (CoF) tokenisation deadline by 6 months to to June 30, 2022. The earlier deadline was December 31, 2021.

Context

The Reserve Bank of India extended the card-on-file (CoF) tokenisation deadline by 6 months to to June 30, 2022. The earlier deadline was December 31, 2021.

What is tokenisation?

  • Tokenisation is the process by which the original card number or Primary Account Number is replaced with a surrogate value called a ‘token’. 

Card-on-File Tokenisation

  • In this process, tokens are created for customer cards to secure them from online frauds.
  • These tokens are managed between the token requestor and the network, thereby allowing customers to store their card details in a secure and compliant fashion.
  • The relationship between token and card-related data is saved in a vault owned by the card networks.
  • As a result, customer card details will be safer than ever before. 
  • The apex body has recommended that businesses, payment aggregators, payment gateways and acquiring banks in the payment ecosystem – particularly payment service providers – use and store ‘tokens’ instead of card information through tokenisation. 

Reason behind the move

  • Operational challenges: There are operational challenges that can hinder the transition to the token-based payments ecosystem.
  • Lack of ecosystem readiness: Banks at present are lax on preparedness.

Verifying, please be patient.

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