Debit and credit card rules are changing on October 1st, how will this affect customers?, Tokenisation

Debit and credit card rules are changing on October 1st, how will this affect customers?

New Tokenisation Rules:

RBI has asked all operating banks to create tokens for card data. Simply put, all online, POS, and in-app transactions made with debit and credit cards should be replaced with bank-issued tokens.

Starting October 1st, the rules for online debit and credit card transactions will change for all users. In order to make all electronic payments safe, convenient, fast and affordable, the Reserve Bank of India (RBI) has commissioned all operating banks to create card data tokens.

Simply put, all online, POS and in-app transactions made with debit and credit cards should be replaced with bank-issued tokens.

What is Tokenisation?

Tokenisation replaces debit or credit card details with tokens issued by the operating bank. This means that the user does not enter her 16-digit number stamped on the card when paying online. Banks issue equivalent tokens with less confidentiality for transactions.

As a result, customer card information is no longer available to merchants, payment gateways, or third-party platforms. This process also masks the card's name, expiration date, and CVV code.

Security Issues

All token based transactions are considered more secure because no real details are shared with merchants or organizations and further misused. Companies keep his last four digits of the card number and card issuer name to track transactions.

how it works?

Starting October 1st, tokens generated for transactions will be irreversible and unique. This ensures that no one can penetrate the security layer and decrypt the payment process to obtain your card details.

The new system will help consumers, merchants and banks by reducing the number of chargebacks, disputes and fraud, according to RBI.

How can I get the token?

The first step in tokenisation is for the customer to click on “Secure card according to RBI guidelines” after entering all card details for the transaction. Once this is done, the merchant will ask the executing bank to generate a unique token for the specific transaction. Once consent is obtained, the merchant sends the request to the card network.

The shopper receives her OTP from the card issuer via mobile phone or email. The OTP has to be entered on the bank side and a token will be generated. The same token will be sent to the merchant. It can be saved along with the customer's phone number and email ID in case there are technical issues with the transaction.