Tokenization - The talk of the town topic but its very important !!

Based on a survey conducted, it has been identified that more than 1.3 million (13 lac) Indian credit and debit card details have been compromised and put on sale on a dark website. 98% of the card details on the dark website are from Indian banks. Hackers are charging Rs 100 for each card detail that is put on sale.

Disclaimer: If your card gets cloned, the bank will have to make a complete or full refund of the stolen amount. As per RBI guidelines, if any unauthorised transaction takes place and the same is reported by the customer within three working days, the customer holds zero liability. As unauthorised transactions take place in a third-party breach where the deficiency lies either with the bank or not with the customer but elsewhere in the system.

Understanding the need of the time, RBI brought tokenization, which was initiated back in 2019 by the Reserve Bank of India and allows card networks like VISA, Mastercard, etc. to offer tokenization services. In simple terms, credit card details will not get stored anywhere over an online portal like they used to. While opting for tokenization, your card details are not going to be revealed to merchants, and customers can make any card payment via secure digital token without sharing complete physical card details.

Currently, card details are shared or stored over merchant websites or cloud systems like Paytm, Google Pay, and shopping websites like Flipkart, Amazon, etc. through encryption to store the data. The best part of tokenization is that card details access will be given to only banks and card networks like Visa, Mastercard, etc. by eliminating merchant involvement, or we can say that merchants won't have the privilege of storing card details over portals.

tokenization-credit-debit-card-security-card-tokenizationAs a result, the 16 digits of the card will be replaced by a unique code called TOKEN. RBI guidelines allow customers to decide on their own whether to adopt tokenization or use the old methods of making payments. Considering there are lots of online fraud cases happening because card details were compromised, adopting tokenization by the customer will be considered a smart move. There will be different tokens generated for different platforms.

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Steps To Activate Tokenization

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Real Time Example over Merchant Platform - Credit and Debit card visibility before Tokenization

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While registering for tokenization, the buyer needs to fill out the complete card details for the first time and then check the box that states "Secure my card as per RBI guidelines".

Real Time Example over Merchant Platform - Credit and Debit card visibility after opting Tokenization


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So after opting for tokenization, the card over the merchant's platform will be completely secured as per RBI guidelines, and users don't need to worry more about online credit or debit card number misuse while making any payment against purchases made. Once a credit or debit card is registered, the buyer will not get a message about securing the card details over the same portal.

“The technology you use impresses no one. The experience you create with it is everything.” – Sean Gerety

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