‘Card tokenization’ deadline extended by another three months | Card tokenization extended three months Tokenization Process Reserve bank ysh 95

MUMBAI: The Reserve Bank of India (RBI) has given credit and debit cardholders another three months to complete the process of tokenization of their cards. On Friday, she announced a decision to extend the card token deadline by three months, to September 30, 2022. This is the third extension given to the process, with the central bank setting June 30 as the deadline.

The Reserve Bank of India (RBI) said in a press release on Friday that the process of forcing merchants and payment transaction forums to delete all card details and replace them with tokens with the consent of the customers has been extended. She said issues related to the implementation of the new order regarding specific types of transactions have been brought to the attention of the industry sector. Also, the number of transactions processed using tokens has not yet been received from all categories of merchants, as indicated by the industry sector.

The RBI has said that these issues are being addressed in consultation with all stakeholders. The RBI hopes that the extended period will be used by merchants and payment industries to prepare all partners to handle tokenized transactions, process token-based transactions, and raise awareness among cardholders. The central bank also expects that steps will be taken during this period to implement an alternative tokenized card system.

What is tokenization?

Currently, in online haircut card transactions, ‘card-on-file’ details like card number, expiration date etc. of the customer are saved by many organizations including merchants. So that in future transactions, cardholders do not have to mention this detail again, making it possible to facilitate transactions in a convenient and short time. However, many merchants have the details of the card in this way, which increases the risk of it being stolen or misused. In addition, there are instances of such details being stored by merchants being misused and causing huge financial losses to cardholders. Therefore, the card details cannot be saved by any organization other than the card distribution network and card issuers, the RBI said in a decree. Also, merchant and payment transaction forums will have to delete all the details of the card and change it to ‘token’ with the consent of the customer.

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