There will soon be good news for all credit and debit card holders, from July 1, 2022, online merchants will no longer be able to store customer card data.
Last year, the Reserve Bank of India (RBI) issued rules for tokenizing debit and credit cards, keeping customer security in mind. According to the rules, merchants were prohibited from storing customer card data on their servers.
These card tokenization rules will now come into effect from July 1, 2022.
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RBI had mandated the adoption of on-file card tokens for domestic online purchases. The deadline for adoption of card tokens across the country has been extended by six months, from January 1, 2022 to July 1, 2022.
It will be stored as an encrypted “token” to help customers make secure transactions. These tokens will allow the payment to be made without disclosing the customer’s details. RBI guidelines mandate replacing the original card data with an encrypted digital token.
So, from July 1, 2022, merchants will have to remove customer debit and credit card data from their records.
The card tokenization system is not mandatory. Therefore, if a customer has not given consent for their card tokenization, then the customer will need to enter all card details like name, card number and card validity instead of entering the card verification value, or CVV, each time they apply online. Payment.
At the same time, if a customer agrees with the tokenization of the card, he will only have to enter the details of the CVV or the one-time password (OTP) during the transaction.
The tokenization system is completely free and offers a smoother payment experience while securing its card data.
Additionally, tokenization only applies to domestic online transactions.
According to RBI, signing up for a tokenization request is done only with the explicit consent of the customer via an additional authentication factor (AFA), and not by means of a forced or default or automatic selection of a checkbox. tick, a radio button, etc.