Mumbai: The rules for using debit and credit cards for online transactions in the country will change from July 1. The apex bank in the country, Reserve Bank of India (RBI) had earlier announced that it will launch the new the card tokenization rule from July 1.
Under the new rule, when a customer starts an online transaction, the merchant will initiate tokenization. It will ask for your consent to tokenize customer’s card. Once given consent, the merchant will send a tokenization request to the card network. The card network will then create a token, which will act as a proxy to the 16-digit card number and send it back to the merchant. The merchant will save this token for future transactions. You will also have to enter your CVV and OTP like before to approve transaction. If you want to use another card, the same process is to be followed again.
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But, this is not mandatory. A customer can choose whether or not to let his / her card tokenized. In that case, the customer will have to re-enter all card details while purchasing anything online.
RBI in last year released debit card and credit card tokenization guidelines. As per the guidelines, merchants were prohibited from storing the data of customers’ cards on their servers. This was to protect and secure customer data. The deadline for adoption of card tokens across the country was extended by six months from January 1, 2022 to July 1, 2022.
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