2 weeks ago. New Delhi, Delhi, India

New debit card, credit card tokenisation rules from July 1: Explained

Debit card and credit card rules concerning online payments will change from July 1
RBI is set to implement the credit card and debit card tokenisation rule
Online merchants will not be allowed to store customer data on their servers

Debit card and credit card rules concerning online payments will change from July 1 for customers across India. The development comes as the Reserve Bank of India is set to implement the credit card and debit card tokenisation rule whereby online merchants will not be allowed to store customer data on their servers to protect their privacy. This includes credit or debit card number, CVV, card expiration date, and other sensitive information.

The reserve bank mandated the adoption of card-on-file (CoF) tokenisation applicable to domestic online purchases. The deadline for the nationwide adoption of card tokenisation was extended by six months from January 1 to July 1, 2022, to ensure a smooth transfer from the current situation.

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What is tokenisation?

By now, you may have received notifications from online merchants and banks to ‘tokenise’ your cards to smoothly carry out transactions. According to the RBI website, “Tokenisation refers to the replacement of actual card details with an alternate code called the “token”, which shall be unique for a combination of card, token requestor (i.e. the entity which accepts the request from the customer for tokenisation of a card and passes it on to the card network to issue a corresponding token) and device (referred hereafter as “identified device”)."

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How to tokenise your credit card and debit card?

Credit card and debit card tokenisation can be done by following five simple steps:

1. Visit your preferred online website or mobile application to purchase items such as food grocery or clothes and then initiate a transaction.

2. On the check-out page, select the credit card or debit card payment option. Now provide the CVV details.

3. Click on the “Secure your Card” or “Save Card as per RBI guidelines”

4. Click on save and enter the OTP received on your registered mobile number

5. Your credit or debit card is now successfully tokenised and is secured. Merchants will not be able to access your information anymore.

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What if someone does not secure/tokenise their card before July 1, 2022?

The credit card and debit card tokenisation process is not mandatory and customers can choose whether or not to let their card tokenised. If someone has their card details saved at any merchant website/application, it will be removed automatically and card details will have to be entered each time while making a transaction.

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Credit card and debit card tokenisation: Other important details

The tokenisation system is totally free of charge and is not compulsory as well. However, it does not provide a smoother transaction experience while also securing your data.

One must note that tokenisation is applicable only for domestic transactions and not for international online transactions.

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The registration for a tokenisation request is made only with explicit customer consent through Additional Factor of Authentication (AFA), and not through a forced / default / automatic selection of check box, radio button, etc, as per the RBI. The customer will also be given a choice of selecting the use case and setting up limits.

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New debit card, credit card tokenisation rules from July 1: Explained

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