New RBI Rules on Online Card Transactions comes into effect from Jan 1st
The Reserve Bank of India’s deadline for wide range of companies — from major e-commerce firms like Amazon, Flipkart to food delivery firms like Zomato, Swiggy — on card tokenisation will come to an end on 31 December.
Starting 1 January, 2022, companies or merchants will not be allowed to save card information on their websites. The RBI had issued guidelines to move towards card tokenisation in March 2020 and re-issued fresh guidelines in September 2021 to boost data security.
Companies have until the end of the year to comply with regulations and got the option to tokenise. Tokenisation is a process by which card details are replaced by a unique code or token, generated by an algorithm, allowing online purchases to go through without exposing card details, in a bid to improve data security.
The RBI has ordered all companies in India to purge saved credit and debit card data from their systems from 1 January, 2022.
Credit card transactions in India crossed the ₹1 trillion ($13.13 billion) mark in October while other modes of digital payments have also seen a sharp uptick over the years.
What does this mean for customers
Starting January 1, 2022, users will not be able to save their debit or credit card details on any e-commerce platform.
They may well have to re-enter card details every time they transact online.
Users can also give their consent to e-commerce companies or other online platforms to tokenise cards who will then ask card networks to encrypt details with additional factor authentication as needed.
Once the e-commerce platform receives the encrypted details, customers can save that card for future transactions…Read more>>