The Reserve Bank of India’s deadline for a large number of companies — from major e-commerce firms like Amazon, Flipkart to food delivery firms like Zomato, Swiggy — on card tokens will expire on December 31.
With effect from January 1, 2022, companies or merchants will not be allowed to save card information on their websites. RBI had issued guidelines to move towards card tokenization in March 2020 and new guidelines in September 2021 to promote data security.
Companies have until the end of the year to comply with the regulations and have the option of tokenizing. Tokenization is a process by which card details are replaced by a unique code or token, which is generated by an algorithm, allowing online purchases to be made without exposing card details, in order to improve data security. .
RBI has ordered all companies in India to purge the saved credit and debit card data from their systems with effect from January 1, 2022.
Credit card transactions in India exceeded 1 trillion ($13.13 billion) mark in October while other modes of digital payments have also seen a sharp increase in the past few years.
What does this mean for customers
From January 1, 2022, users will not be able to save their debit or credit card details on any e-commerce platform.
They may have to re-enter the card details every time they transact online.
Users can also give their consent to tokenize cards to e-commerce companies or other online platforms which will ask the card network to encrypt the details with additional factor authentication as required.
Once the e-commerce platform receives the encrypted details, customers can save that card for future transactions.
Merchants and bankers argue that they have not been given enough time to comply with the changes, while running out of tokens will mean customers will have to manually enter their card details every time they complete an online purchase. will be required, which may put off some customers.
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