Card On File Tokenization Has Numerous Benefits For You

Even before the Covid-19 pandemic hit India, its digital payment story was going strong, and the pandemic just made it stronger. After being locked up in our homes for months and the lack of choices taught us that we have to accept the new change and start doing everything online right from paying bills, ordering food to buying medicines or even taking doctor's consultation.

We realized the convenience and safety of online payments. But with convenience came the risk of cyber and digital frauds. With the massive rise in digital payments, cyber security also became a bigger challenge.

According to latest data shared by the government in the parliament the debit, credit and internet related fraud rose to Rs 63.40 crore in the financial year 2020-21. It was Rs 58.61 crore in financial year 2019-20.

To take care of this rising issue, the Reserve Bank of India has taken multiple steps and one of them is card on file tokenization. RBI has made it mandatory for all the authorized card networks and issuers to adopt card on file tokenization as it can effectively protect consumer data from third party attacks. In other words, no one except you and your card issuer and or card network will be able to store your actual card data. RBI has extended the deadline to September 30, 2022, to make sure that all the stakeholders are ready for the transition.

What is tokenization?

According to RBI's official website, "Tokenization refers to replacement of actual card details with an alternate code called the "token", which shall be unique for a combination of card, token requestor (i.e. the entity which accepts request from the customer for tokenization of a card and passes it on to the card network to issue a corresponding token) and device (referred hereafter as "identified device")."

RBI clearly directs that the registration for a tokenization request can only be done "with explicit customer consent through Additional Factor of Authentication (AFA). It is free of cost and aims to boost cardholder's confidence in the whole online shopping process.

How is it done?

The process of tokenization is quite simple. It requires you to just save the card details on your preferred merchant website or app. Once you have initiated the process the card details punched in by you, are replaced with a string of characters which is called a 'token'. Once the token is issued, the merchant can only see the four digits of the token which makes your card completely safe and secure.

Subsequently, whenever you make any online transaction only a token is shared with the merchant. The details of the card are completely masked by the token. For instance, if you order food online from a food delivery partner, you do not have to store your credit card details on the app. In case the website or app is hacked it can never track your card details, that's the benefit of tokenization.

How to tokenize your Mastercard, debit or credit card?

The process involves just 4 simple steps: -

Step 1: Visit the website or app, put in your card details and initiate the transaction
Step 2: Now select debit/credit card on the checkout page and provide all the details with CVV number.
Step 3: Choose the checkbox saying "secure card" or "save card as per RBI guidelines"
Step 4: You will receive an OTP on your registered mobile number which you have to enter to finish the process

That's it and your card is tokenized!

You can also watch this video Mahendra Singh Dhoni to understand more on tokenisation: -

Benefits of tokenization

• Card tokenization is a safe and time saving process.
• Tokenization helps you with fast checkouts because you don't have to punch in your card details again. Once the card details are saved only the token is used for the whole transaction.
• By saving your card details you can easily enjoy several benefits extended by merchants and card issuers like cashback and loyalty bonus without sharing your card details.
• Tokenization reduces the chances of 'transaction failure' because there is no chance of a cardholder punching the wrong card details.
• You can very easily track all your cards related activities in just few clicks.

RBI has answered tokenization related FAQs here :-

https://www.rbi.org.in/commonperson/English/Scripts/FAQs.aspx?Id=2917

To know more click on https://bit.ly/3ox1GTs

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