What is RBI Tokenization ? How can You Tokenize Your Credit & Debit Cards as per RBI Guidelines

There is big news for credit card and debit card holders in India. Actually, from 1 October 2022, the payment rules are going to change. The Card-on-File Tokenization/CoF Card Tokenization rule of the Reserve Bank of India (RBI) is going to come into effect from the 1 October 2022. The RBI tokenization system will, in fact, prove to be extremely beneficial for the users. With this, while on the one hand the payment experience of the users will improve, on the other hand the transaction with credit card and debit card will become safer than before.

Online payment has increased a lot since the Corona period as that we were not able to move outside so became dependent on the online services. Now most of the people use Debit Card and Credit Card and the way online payment has increased, in the same way the cases of fraud have also increased. In such a situation, to prevent these frauds, RBI has asked to issue a unique token by merging all credit and debit card data online, POS and in-app transactions into one.

What is RBI Tokenization?

Firstly, tokenization means that your card (debit card, credit card) information, such as 16-digit number, name, expiry date and code which was previously saved for future payments.  and they will be replaced by a token. The token is used by you merchant website for the transaction. Whenever you order goods online, your card details are immediately displayed on the website which contains the card number and your name.

You are asked to enter CVV, then comes OTP and after filling it, the transaction is completed, but now it will not work. From 1 October 2022, the Reserve Bank has asked all companies including  Swiggy, Amazon, Myntra, Flipkart, Zomato etc., that they cannot keep any data of the consumer’s card such as card number, CVV and expiry date.

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RBI Tokenization 2022 Complete Information

Authority NameReserve Bank of India
Scheme/service NameTokenization
Purpose of TokenizationSafeguard the customer’s credit card and debit card from any cyber fraud
Date of implementation1 October 2022
What is RBI Tokenization ? How can You Tokenize Your Credit & Debit Cards as per RBI Guidelines

Benefits of Card Tokenization

  • Reserve Bank of India is implementing these norms to secure the card information of the customers.
  • Currently, the bank card information is saved by the merchant during a single transaction. In such a situation, if the website of the merchant is hacked, then the information of the customers is also not safe. But with card tokenization, the data of all the customers will be with the bank and not with the merchant website.
  • Tokenization will also save you the hassle of entering your card details every time.
  • The customer will not have to remember the token number as it will remain with the merchant, in a way it will be the confidential code of your card.
  • After cyber fraud, now banks around the world are protecting the card data. So your token will be different at each merchant or e-commerce portal by this the risk of theft of card details will be reduced.

Steps to generate token for tokenization

The Reserve Bank of India (RBI) is set to implement its card-on-file tokenization norms from next month i.e. 1 October 2022, in view of complaints related to misuse of debit or credit cards. This is being implemented in view of the increasing incidents of misuse of debit or credit cards.

  • When you visit an e-commerce website or any app to make a payment, you will have to fill the details of the card from which you have to make the payment.
  • Then you have to secure the card. For this, to tokenize your card as per RBI instructions, you have to select the option ‘RBI Guidelines on Secure Your Card’.
  • After that you have to press on the OK the option of creation. To complete this process, OTP will come on your phone and on the email linked to the bank, which you will have to enter again.
  • Then your token will be created. In this your card data will be saved in a token.
  • The next time you make a payment on the an e-commerce or app again, only the last four digits of your card number will be visible to identify your card.
  • So in this way the data of your card will be saved in the form of token and it will also be secure. With this you will be able to make payments easily.
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