Indian fintech company, Paytm, has tokenised over 52.3 million cards across VISA, Mastercard and RuPay to align with the Reserve Bank of India’s card tokenisation mandate to control fraudulent activities and secure users’ card information.
One97 Communications Limited (OCL), the company that owns Paytm, released a statement on Monday morning stating that with this development 93 percent of the monthly active cards on the Paytm app are tokenised. “This brings with it faster checkouts, as well as success rates that are at par or higher compared to saved cards,” the statement read.
“We have made great progress in card-on-file tokenization, with over 93 per cent of monthly active cards on Paytm app tokenized. Being a leader in digital payments, we are aligned with RBI’s initiative to make online card transactions safe and secure for consumers,” said the company’s spokesperson.
What is tokenisation?
As per RBI, Tokenisation refers to the replacement of actual card details with an alternate code called the token. This way of transacting is considered safer as the actual information of the cardholder is not shared with the merchant at the time of processing transactions.
The deadline for complying the RBI’s directive on the card-on-file tokenisation (CoFT) for merchants is September 30, 2022. The initial deadline was December 2021 which was later pushed to June 31, 2022. RBI’s deputy governor, T Rabi Sankar, had said in June this year that the payments ecosystem is 'by and large prepared' to implement tokenisation for card-based transactions.
Ever since the mandate was issued last year, companies have been taking steps to develop tokenisation solutions. For instance, PayU launched ‘PayU Token Hub.’ Bengaluru-based unicorn Razorpay launched the ‘Razorpay TokenHQ’ a multi-network card tokenisation solution. Last week, another fintech player, Bengaluru-based PhonePe, announced that it has tokenised 1.4 crore or 14 million debit and credit cards.
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