Reserve Bank of India has allowed ‘Tokenisation’ of card payments. Generally, consumers save their debit or credit card details with any service provider, to make payments smooth, and easy. Often, this is a mandatory requirement as well.
For instance, say Paytm, Amazon or Flipkart. Users save their cards details
with these service providers for future payments, and the payment is often done with a PIN or password or sometimes just the CVV number.
However, in case any such service provider/website/app gets hacked, then users’ card details can be compromised, and data stolen.
To avoid this scenario, RBI has now allowed ‘Tokenisation’ of card payments, which will avoid such frauds/data theft.
‘Tokenisation’ Of Card Payments: How Does This Work?
‘Tokenisation’ works on the principle of a virtual card, which is also called tokens here.
In this system, instead of saving the actual card details: name, card numbers, expiry date etc, the user will be able to generate a unique ‘token’ or a virtual card for a specific service.
Whenever the consumer is required to make a payment, they can use the token, and an additional authentication PIN to finalize the payment.
Now, this unique token will have three aspects:
The token requester (for example Amazon, Flipkart, Paytm) and
Identified device (example being your mobile phone or tablet/laptop)
Each such tokens would be unique for a service, and the same token cannot be used elsewhere, which provides better security.
Risks Reduced In Card Payments
Such tokens mask the actual debit/credit card details and help the consumer………Read More>>