Indian fintech platform, PhonePe, has tokenised 1.4 crore or 14 million debit and credit cards to align with the Reserve Bank of India’s card tokenisation mandate to control fraudulent activities and secure users’ card information.
What is tokenisation? It 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.
Under the Safeguard Tokenisation solution, PhonePe has been creating tokens since December 2021 with major card networks including the likes of RuPay, Visa, and Mastercard. According to a statement by the company, over 80 per cent of PhonePe’s active users have already tokenized their cards, and it is on track to meet RBI’s September 30 deadline for tokenising all debit and credit cards.
Commenting on the development, Deep Agrawal, Head of Payments at PhonePe said, “PhonePe Safecard solution enables our users and merchant partners to continue experiencing the convenience of saved card transactions with increased security. For customers, their card details are saved only by the issuer banks and card networks, minimizing the risk of data leakage and transaction fraud. For merchants, safer transactions translate to consumer confidence in using cards on online platforms, thereby helping merchants witness growth in overall transactions.’’
He further said that card tokenisation is a progressive move by the RBI. Ever since the mandate was issued, 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 card multi-network card tokenisation solution.
Additionally, PhonePe also started processing token-based transactions in April 2022 and processes almost all eligible transactions through tokens. The success rate of transactions processed via tokens on PhonePe has shown an improvement of 2 per cent in comparison with card-based transactions, over the past few weeks, the fintech platform revealed.
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