The Reserve Bank of India (RBI) will start using tokens for credit and debit card transactions on July 1, 2022. This is to safeguard the information on credit and debit cards. Last year, they expanded the use of tokenization last year and permitted card issuers to act as token service providers (TSP).
Soon, everyone with a credit or debit card will get some good news. As of July 1, 2022, online merchants will no longer be able to store their customers’ card information.
They Reserve Bank of India (RBI) made rules about the tokenization of debit and credit cards last year so that customers would be safe. Under the rules, stores were not allowed to store card information on their servers.
The laws governing card tokenization will now take effect on July 1, 2022.
For domestic internet purchases, the RBI has mandated the use of card-on-file tokens. The date for widespread use of card tokens was pushed back from January 1, 2022, to July 1, 2022, by a full six months.
To assist clients in conducting safe transactions, it will be saved as an encrypted “token.” Payment may be made using these tokens without revealing the identity of the customer. RBI rules say that the original card data must be swapped out for a digital token that is encrypted.
As a result, starting on July 1, 2022, businesses must remove client debit and credit card information from their files.
It’s not necessary to use card tokenization technology. So, when making an online payment, a customer who hasn’t given permission for his or her card to be tokenized will have to give the name, card number, and expiration date, not just the card verification value (CVV).
Also, if a customer agrees to card tokenization, they will only need to provide their CVV or one-time password (OTP) information when making a transaction.
The tokenization solution is free, makes payments easier, and protects cardholder information.
Some retailers compel their consumers to save their credit card information.
The likelihood of card data being stolen significantly rises when such information is accessible to many different retailers. Some shops’ credit card information has been hacked or leaked in recent months.
According to the RBI, any theft of card information may also be used to commit fraud within India using social engineering tactics. This is because many countries do not need an AFA for card transactions.
However, it noted that tokenizing card data must be done with the specific agreement of the client and needs AFA. According to the RBI, this CoFT will provide clients with the same level of ease as it currently does, while enhancing customer data security.
