FORTIFYING CARD PAYMENTS

TOKENISATION IS THE FUTURE OF CARD-BASED PAYMENTS IN INDIA ASIT FACILITATES STORAGE OF SENSITIVE DATA BY SECURING IT

T he importance of protecting customers from online payment frauds in the digital era cannot be overstated given the increase in financial crime in the form of cyber attacks and data breaches, which makes such users vulnerable.

If it is not contained, it will deter customers from using the digital platform, which in essence is the vision of the government, that is, to transform India into a digital economy.

Thus, with the agenda of protecting the customer and strengthening data protection policies, the apex bank of India, the RBI for the first time in March ’20 introduced Card-on-file Tokenisation (CoFT) norms for payments, preventing merchants/aggregators from storing important customer card information.

Deadline implementation has been moved forward by the RBI on multiple occasions, from 31st Dec ’21 to 30th Jun ’22, and finally to 30th Sept ’22 to ensure that the hurdles are minimized as multiple parties need to work together to ensure its success.

WHAT IS TOKENISATION

Tokenisation is the process of replacing actual credit/debit card details of a customer with a number that is randomly generated using an algorithm, which allows the concealment of sensitive card-related information that could be misused in case of cyber attacks or frauds.

The original number mapped to the token rests only with the tokenisation provider, making it impossible to crack, just leaving the token with no meaning. Cybercriminals who steal data will not be able to decipher the meaning of the token. This makes it hard to execute a fraudulent transaction, thus making it more secure than encryption.