How new tokenisation rules can affect your credit and debit card payments 

From January 1, 2022, your card details saved on merchant websites will get deleted as per the RBI mandate thereby reducing the chances of your data being lost or stolen. This means that going forward, you will either have to enter full card details each time you pay or opt for tokenisation. If you are wondering what tokenisation is and how to opt for it, here are all the details: 

What is tokenisation?  

The process of tokenisation replaces actual card details with an alternate code called the “token”, which is a unique combination of the card, token requestor, and device through which the request is made.  

Pankaj Bansal, CBO, BankBazaar.com, explains, “This means that going forward, instead of saving your card details on Amazon, you would be saving a unique token. This token would be only for that particular merchant and that particular device.  As there is no card data being saved anywhere except by the card network and issuer, chances of card data being lost or stolen is reduced.” 

How to opt for tokenisation? 

HDFC Bank website states the following three steps:  

Step 1 –Get the card tokenised by initiating a request on the website/app you wish to use. 

Step 2 – The merchant then forwards the request directly to the bank which issued the applicable credit card or to Visa / Mastercard / Diners / Rupay, with the consent of the card issuing bank. 

Step 3 – The party receiving the request from token requester, will issue a token corresponding to the combination of the card, the token requestor, and the merchant. 

Will it cause inconvenience? 

Currently, not all merchants are showing the option to tokenise cards. Very few like Zomato are explicitly, displaying on their apps.  

“There could be some inconvenience as you will have to re-register credit or debit card details. However, this is a one-time process and once the fresh mandate is registered, the purchase process will be the same as now,” says Bansal. 

How to manage tokenised cards? 

You have the option to view the list of merchants with whom you have registered a token and de-register any such token in future via your issuer’s app or internet banking.  

“So, if you do not intend to shop on a site later, or do not wish a recurring payment associated with your account to be renewed, you can delete the associated token. You can also set and modify per transaction and daily transaction limits for tokenised card transactions. In case your card is renewed or replaced, you will have to explicitly consent to link it with the merchants with whom you had registered the card earlier,” says Bansal. 

Does it include OTPs or additional factor of authentication? 

The payment process is expected to be the same as the current one. “The only exception is that you will have to register a fresh mandate for your card with every merchant website where you wish to save your card details,” says Bansal.