RBI comes with an amazing announcement for online buyers. Frequent shoppers can now enjoy the card-on-file tokenization system of debit and credit cards. The Reserve Bank of India governor Mr. Shaktikanta Das has recently proposed the announcement of a card-on-file facility. This is known as CoFT (card-on-file tokenization). This will be issuer-bank level.
He also defined some amazing benefits of a growing acceptance of the tokenization of card data while making transactions on online platforms and announcing the proposal.
For those individuals who are not aware of the announcement, there will be a new channel introduced for cards on file for tokenization. This simply means that debit and credit card users now will be able to generate the tokens for shopping through cards on their bank application. Now they don’t need to go for any e-commerce website or apps while purchasing things from the online arena.
Get rid of the safety concerns on commercial portals
With the new announcement now, users can use the tokens on their bank level instead of worrying about the data and security on these e-commerce merchant portals. This is the finest move to give users control over their card tokens.
The exact meaning of tokenization!
Tokenization is the finest way to convert the card or paper India into a digital country. It replaces the debit card and credit card’s 16-digit number with a unique token. The generated token will be valid for specific one merchant at a time. This will hide the actual details of your card from the merchant so that if in case the data of the card leaks from the merchant’s site, the hackers cannot misuse the card. It will hide the complete digits and details of the card.
The generated token contains no personal info and keeps changing for a new merchant every time. These tokens can be used by people for online shopping and transactions, mobile point-of-sale transactions, in-app purchases, and many more others. The guidelines for using the tokenization for both credit and debit cards in the future will be applicable when it is opted for by consumers.
What is the exact announcement of RBI?
RBI introduced the card-on-file tokenization system in early September 2021 and it comes in implementation from October 1, 2022. So, over 56 crore tokens are reported to have been issued by the customers with a transaction value of Rs. 5 lakh crores. It also improved the security of transactions and approval rate.
Until the proposal was announced by the RBI governor users had to create various tokens through each application of the merchant’s webpage. It would require a lot of time and effort from the user. Going forward, the tokens will be created at the issuer bank-level and will be linked with existing bank accounts with different e-commerce websites and applications.
What’s more?
By using the ease of generating the tokens at the issuer bank level it reduces the duplication of the tokenization process and prevents users from fraud. Along with time-saving it also increases the transaction security for consumers and results in reducing debit & credit card data-related frauds. For more updates on the tokenization and tech world follow the page and get the details briefly.