Lagatar24 Desk
New Delhi, Dec.22: E-commerce companies like Amazon and Flipkart, as well as online delivery aggregators like Zomato, would not be able to save card information on their systems starting January 1, 2022 as per the new Reserve Bank of India’s guidelines.
To improve security, the RBI announced guidelines in March 2020 that prohibited businesses from keeping consumers’ card details. The regulatory authority updated its standards on card tokenization services in September of this year to increase the safety and security.
“Tokenisation of card data shall be done with explicit customer agreement and require Additional Factor of Authentication (AFA),” the RBI had stated in a statement.
Beginning next year, customers conducting online transactions on any e-commerce platform will be required to enter their debit or credit card information each time. Customers can, however, avoid the bother by giving platforms permission to tokenise their cards.
Tokenisation allows online purchases to be completed without disclosing card details by replacing card details with a unique algorithm-generated code, or token.
Customers can save a card for future transactions once the encrypted details are received by the e-commerce site. Customers will be able to identify tokenised cards by looking at the last four numbers, as well as the issuing bank and card network name, on e-commerce sites.
Most major e-commerce platforms can currently tokenise just Mastercard and Visa-issued cards. Cardholders from different financial services should be able to tokenize their cards in the near future.
Both credit and debit cards must follow the new RBI criteria. However, international transactions are exempted from the new requirements. The new RBI standards are only applicable to domestic cards and transactions.
Customers will not be charged an additional fee for card tokenisation.
However, card tokenisation is not mandatory. Customers can choose to tokenise their cards for faster transactions or enter their card information manually.
