For people using Credit Card and Debit Card, some rules are going to change from next month. The Card-on-File Tokenization (CoF Card Tokenization) rule of the Reserve Bank of India is going to come into force from October 01. The Reserve Bank of India (RBI Tokenisation) says that after the implementation of the tokenization system, the payment experience of cardholders will improve and debit card and credit card transactions will be more secure than before.

RBI has extended the deadline twice

After the implementation of the new rules, whenever customers make payment by credit card and debit card at point of sale machines, online or in any app, their card details will be stored in the form of encrypted tokens. Earlier this rule was going to come into force from January 01. Taking into account the suggestions received from various stakeholders, RBI had extended the deadline for storing cord-on-file data from December 31, 2021 to June 30, 2022. Later it was again extended till 30 September. Now the Reserve Bank is not considering to extend this deadline further. This means that now the payment companies will have to delete the credit card and debit card data of the people after 30 September 2022 After this, the data of people's credit card and debit card will have to be erased.

Merchants have issued so many crore tokens

According to a report by news agency PTI, most of the big merchants have already adopted the new rules of tokenization of the Reserve Bank. The report quoted sources as saying that so far 195 crore tokens have been issued to customers in lieu of debit cards and credit cards. Many digital payment companies were demanding from the Reserve Bank to extend this deadline. The companies argued that they have not been able to do so yet. Implementing the new system in such a short time may affect business. Companies were saying that there are still many operational problems in implementing this change. Now that most companies have implemented it, there is little hope of extending the deadline further.

what is this tokenization

Under the new arrangement, the Reserve Bank has prohibited payment companies from storing the data of customers' credit cards or debit cards. These tokens will be unique and the same token will work for multiple cards. These tokens will be unique and the same token will work for multiple cards.

Fraud cases will be reduced by token system

The Reserve Bank believes that the implementation of the system of payment with tokens in lieu of cards will reduce the cases of fraud. At present, the risk of fraud with customers increases due to leaking of credit card or debit card information. The new system is expected to reduce such cases of fraud. The Reserve Bank says that at present, e-commerce websites, merchant stores and apps etc. store the card details after the customers make payment with debit card and credit card. In many cases, merchants are left with no option but to store the card details before the customers. If these details are leaked, there is a possibility of customers being duped. These dangers will be reduced with the new rules of the Reserve Bank.