In an effort to make debit, credit or prepaid card payments safer, the Reserve Bank of India on Tuesday issued guidelines on the use of tokenisation, which would mask the sensitive card data and use a unique token instead.
“Tokenisation involves a process in which a unique token masks sensitive card details. Thereafter, in lieu of actual card details, this token is used to perform card transactions in contactless mode at Point Of Sale (POS) terminals, Quick Response (QR) code payments, etc,” RBI said.
RBI said any card payment network can offer card tokenisation service to a token requestor (third party app provider), and a cardholder can avail the services by registering the card on the token requestor’s app with consent. Customers won’t be charged for this.
All existing regulations of RBI on safety and security of card transactions, including the additional factor authentication, will be applicable for tokenised card transactions as well, RBI said.