The RBI has now permitted authorised card payment networks--covering credit, debit as well as prepaid cards--to offer tokenisation services to their customers. This is banking regulator's effort to enhance the safety and security of the payment systems in the country. Tokenisation is a process that masks actual card details using a unique alternate code called the "token", which is unique for a combination of card, token requestor-for instance m-commerce apps-and devices like smart phones. 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, in-app payments and the like, thereby protecting cardholders from fraud and data-theft.
Opting for tokenisation, which masks actual card details, reduces risks related to data theft.
In India, there were 1,035.64 million cards outstanding on November 2018, out of which 992.4 million were debit cards and 43.24 million were credit cards and this has grown from a total 778.98 million cards in 2016. This impressive growth in other words represents the augmented use of this cashless mode of payment. The volume of card transactions in fact went up by 1.5 times in this period. In value terms these transactions more than doubled-from Rs 1,82,300 crore in November 2016 to Rs 3,83,904 crore in November 2018. This was driven by debit and credit card transactions, which grew by 113.3 per cent and 94.7 per cent, respectively, in value terms during the period.
Source: ASSOCHAM-NEC report
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