Santa Claus comes around just once a year. In the meantime, there are Credit Cards.
  • Credit Card Tokenization

    Earlier, merchants used to store a customer's card number, CVV number, and other sensitive details so as to enable purchase in a simplified and convenient manner. However, according to a mandate passed by the Reserve Bank of India (RBI), from 1 October 2022, merchants cannot store such information.

    Instead of using actual cards, tokenised cards will be used where a customer can either verify the details of their cards and use tokenisation one time or provide all the credit card information for online transactions.

    How Does Tokenization Work

    To get your card tokenised, you need to place a request through the token requestor's app. Your request will be forwarded by the token requestor to the card network. A token will be issued by the card network according to the combination of the card, the device, and the token requestor with the agreement of the card issuer. The RBI has approved tokenisation via mobile phones or tablets for all activities including contactless card transactions, payments via QR codes, and app payments.

    Payment networks like Visa, Rupay, and MasterCard, which serve as Token Service Providers (TSPs), generate the tokens. While making transactions, these networks give tokens to digital payment/e-commerce platforms instead of providing your credit card details.

    Advantages of Tokenization

    Some of the advantages of tokenisation are given below:

    • Easy to use: Tokenization is easy to use as you don't have to provide PIN for transactions up to Rs.5,000. The whole process is simple and convenient.
    • Safe to use: Tokenization is safe and secure. The payment done is safe and tokenisation protects you from fraudulent activities.
    • It is cashless: You do not need a wallet to conduct the tokenisation process. All you need is a smartphone to ensure you complete your transaction in a simple and cashless manner.
    • No need for a credit card or a debit card: You do not need any type of physical card to make your payment. Just save the details of your card on your phone and you can make payments anytime, anywhere.

    How to Save Your Card on the Payment App for Seamless Transaction

    Given below are the steps you will have to follow to save your card on the payment app:

    • Visit the payment app and provide the details of your credit or debit card.
    • Accept the terms and conditions and click on 'Proceed'.
    • Enter your card number.
    • A one-time password (OTP) will be sent to your registered mobile number. Enter the OTP and get your card validated.
    • Once your card is validated, all you need is your smartphone to conduct a transaction.

    How to Enable Card Tokenization Feature on Google Pay

    The steps to enable card tokenisation feature on Google Pay are mentioned below:

    Step 1: Open the 'Google Pay' app on your smartphone.

    Step 2: Enter your card details.

    Step 3: An OTP will be sent to your registered mobile number. Enter the OTP to complete the one-time set-up.

    Step 4: After enabling this functionality, you can make payments at any NFC-enabled terminal.

    Step 5: With this feature, all customers will be able to use tokenised cards to make purchases from major online merchants.

    You will also be able to make regular payments, including those for bills, insurance, recharging mobiles, etc.

    How to Enable Card Tokenization Feature on PhonePe

    The 'PhonePe SafeCard’ is a tokenisation solution introduced by PhonePe. It allows online businesses and their consumers to enjoy the ease of stored card transactions while also increasing security. It complies with the most recent RBI guidelines. To tokenise a debit or credit card for the first time, you must provide a one-time consent through OTP and complete a transaction.

    With this feature, you will be able to use saved card details for seamless transactions on PhonePe. The 'PhonePe SafeCard’ facility improves the customer experience while saving businesses time and effort.

    How to Enable Card Tokenization Feature on Paytm

    The steps to enable the tokenisation feature on Paytm are mentioned below:

    Step 1: Open the Paytm app on your mobile phone.

    Step 2: On your profile, navigate to ‘Payment Settings.’

    Step 3: Click on ‘Saved Cards.’

    Step 4: Tap the 'Secure Now' button below the saved card information.

    Step 5: Enter your CVV number.

    Step 6: Tap on the 'Proceed' button. To verify your card details, Re.1 will be deducted from your card.

    Step 7: An OTP will be sent to your registered mobile number.

    Step 8: Enter the OTP and tap on ‘Proceed.’

    Step 9: On completing the payment process, you will receive a scratch card worth 500-5000 points, redeemable twice per user.

    FAQs on Credit Card Tokenization

    1. Where will these Tokens get used?

      These tokenisations will be used to ensure that all your sensitive data related to your card remains protected. Your sensitive data will be replaced by a token while you continue to conduct transactions in a successful manner.

    2. What is the benefit of tokenisation?

      One of the major benefits of tokenisation is that it is completely secure, payment is smooth and safe as the details of your card are not saved by the merchants.

    3. How does the process of registration for a tokenisation request work?

      The process of registration is done via explicit customer consent through Additional Factor of Authentication (AFA). You will be aware of all the terms and conditions, and you can choose how you wish to use this facility and set up your limits.

    4. What happens to my saved cards from 1st October 2022?

      In effect from 1 October 2022, the merchants will not be allowed to save the details of your card which earlier was done to make transactions faster. Now, you can use the tokenisation facility which will ensure the details of your card are safe and you are still able to conduct transactions seamlessly.

    5. Is there any limit on the number of cards that I can request for tokenisation?

      No, there is no limit. You can request tokenisation for any number of cards.

    6. Will the Add-On card holder also need to tokenise his/her card, in case the primary card holder has already tokenised his/her primary card?

      Yes, the add-on card holder will have to tokenise their card separately.

    7. How do I disable an activated card?

      You can either disable your card through net banking where under the 'Cards' option you will have the option to disable your card. You can also call the bank's customer care service and request the disabling of your card.

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