From the 1st of January, 2022, RBI has reinforced the card tokenisation norms. This has been done so that debit and credit card users stay protected from malpractices like fraud and cyber theft during online transactions. These norms ensure that no one other than the card user or network can store card data. This includes all entities on the chain of payment other than the user or network. If data had previously been stored, it would also be erased for good. The only data such entities will be able to store are the last four numbers of the real card and the name of the card issuer. This will help users track their transactions better.

• Card tokenisation is a process put in place by the Reserve Bank of India.
• Tokenisation of cards helps protect the user’s card information from cyber thefts and frauds.
• The process also helps users carry out safe, one-click transactions without worrying about their details being stolen.

Any time users carry out a transaction online, it is usually done through a debit or credit card. For this, the user has to enter their card number, date of expiration, and CVV. This is followed by an OTP confirmation. Apps or websites a user logs into regularly have the card details saved. However, occasionally, these details might need to be entered manually. Most such transactions happen to be secure, but that does not guarantee their safety from cyber threats. The process of tokenisation helps in this aspect.

The main purpose of tokenisation is to replace the real details of the card with a random code called ‘token’. This code is unique and has random numbers. With such a token in place, all the details of a customer’s account remain safe even if data breaches happen.

Below is a step-by-step breakdown of how tokenisation works:

• Every token is unique to each transaction, depending on the card, the card network, the device, and the e-commerce merchant.
• A token request must be made by the card user to generate the token. Below is the process for the same:

1. The cardholder first requests the e-commerce merchant’s app to send the tokenisation request across to the card network.
2. Before issuing a token, the card network will consider aspects like the device used, the online merchant, and your card.
3. Once the token is generated, it will be shared with the e-commerce merchant carrying out the transactions. Your card details will not be revealed.

• If cards are not tokenised, users will have to enter the entire 16-digit card number during every online transaction.
• The main aim of RBI for introducing tokenisation is to keep the online transaction space free from fraud or cyber theft.
• Visa and MasterCard also generate tokens and are known as token service providers (TSP).

The tokenisation of cards has had its fair share of impacts on users. Some of them are listed below:

• The main impact that card tokenisation has had is on the safety of card details of users.
• When card details are saved on merchant websites, chances of online fraud and theft increase.
• Not opting for the tokenisation system leaves users with the effort of entering all their card details every time they transact online.
• A one-click transaction helps carry out transactions quicker since all the card details are already saved.
• Tokenisation is not only limited to mobile phones and tablets anymore; it includes desktops, wristwatches, bands, other wearable devices, and Internet of Things (IOT) devices.

The tokenisation of cards by the RBI is a great way to help users stay protected from cyber fraud and thefts. Under tokenisation, the card details are usually saved only with the user or the network. Any merchants or online websites only receive a token, a unique number determined by the combination of various aspects. In case cyber criminals decide to steal card information from the merchant, they will only get their hands on the token, which will be of no use to them.

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