RBI Prolongs the Deadline for Card Tokenization
On Friday, the Reserve Bank of India (RBI) declared the prolongation of the deadline for credit and debit cards’ tokenization by additional 3 months till 30th September this year. a deadline had earlier been set by the RBI till the 30th of this month, instructing the payment aggregators and merchants to delete the entirety of card details along with replacing them with tokens before this date.
As put by the regulator, a few problems within the agenda’s implementation have been pointed out by stakeholders in terms of guest checkout transfers. In addition to this, the figure of transfers processed utilizing tokens has not yet gained traction throughout the entirety of the merchant categories, it disclosed. The regulator specified that these problems were being handled while having advice from the stakeholders.
RBI Delays the Card Tokenization Deadline to Facilitate the Community
This prolonged time frame will be of great use for the industry to facilitate the entirety of the stakeholders and prepare them to tackle tokenized transfers as well as to process the transfers based on tokens. It will additionally implement a substitutive mechanism(s) capable of tackling the entirety of the operations after the transfers (taking into account settlement and chargeback handling) dealing with the guest checkout transfers, that at present includes CoF data’s storage by institutions other than card networks and issuers.
Another purpose of extending the time limit is to spread awareness among the public regarding the procedure of manufacturing tokens as well as utilize them to carry out transfers, as the regulator put it. The cardholders were also persuaded by the RBI to tokenize them to enhance their security. Up till now, the creation of nearly 195M tokens has been done. Without any restriction, it is up to the cardholders whether or not they want to manufacture a token to keep on transferring by providing card details while doing a transfer.
A Few Merchant Giants Are Still Reluctant about Tokenization
Tokenization is known as a procedure through which the card particulars are substituted by an exclusive token or card, permitting online purchases without producing delicate card information. According to the exclusive order of the RBI, the credit and debit card data of the consumers must be deleted by the entirety of the merchants and the card payments should be replaced with new tokens for in-app, point-of-sale, as well as online transfers.
It was reported on 6th June that many big online merchants had been apprehensive regarding the ecosystem’s preparedness to tackle tokenization and transfer volume while wishing to escape payment disturbances for customers.
