Tokenisation and prevention of online card fraud.

The Reserve Bank of India has mandated the tokenisation of credit/debit cards for online merchants from October 1.

Earlier, card details for online purchases were stored on the servers of these merchants to help customers avoid keying in their details every time they shopped with that merchant.

Tokenisation replaces a card’s 16-digit number on a plastic card with a unique alternate card number or ‘token’ unique to the combination of card, token requester, and device.
Tokens can be used for online, mobile point-of-sale, or in-app transactions.
This token will carry the details of your cards, such as 16-digit numbers, names, and expiry dates, which you used to save earlier for future payments.
- So, instead of all the details mentioned above, the merchant’s website will use a unique token for the transaction.

Safe and secure:
- The RBI says that a tokenised card transaction is safer as the actual card details are not shared with the merchant.
- The token generated upon request for a specific merchant is unique to a specific card number and is usable only on that particular site or mobile app. The token is useless outside of that merchant’s ecosystem.
Easier Payments:
- The token is used to make contactless card transactions at Point of Sale (PoS) terminals and QR code payments.
Data storage:
- Only card networks and card-issuing banks have access to and can store any card data.

The RBI was established in 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
The RBI’s affairs are governed by a central board of directors.
The board is appointed by the government of India.

Content Source: The Hindu