New Credit And Debit Card Rules For Online Payment Coming In July, Here’s How You Will Be Impacted | Digit

For all the credit and debit card users, July will be the month which is going to bring some major changes. The RBI (Reserve Bank of India) has announced to  introduce tokenization of card transactions from July 1st, 2022. As per RBI, tokenized card transactions are considered to be much safer as the actual card details are not shared with the merchant during the procedure of online payments. Here is everything you need to know about the new rules regarding online payments made through credit or debit card. 

What is Tokenization?

Tokenization refers to replacement of actual card details with a “token” which will be unique for a combination of card ,token requestor(requestor being the entity which accepts requests from the customers for tokenization of a card and passes it on to the card network in order to issue a corresponding token) and a device. 

The actual card data, token and other relevant information are stored in a secure mode by the authorized card network. The Primary Account Number (PAN) i.e.Credit and debit card details cannot be stored by a token requestor. Even the card networks are mandated to get the token requestor certified for safety and security purposes that conform to international best practices or globally accepted standards. 

Benefit of Tokenization:

Any online payment  made by tokenized cards is set to protect the users from fraudsters as the actual card details will be replaced by a token while sharing card details with the merchant during any transaction. 

A fact to note down is that, every token will be unique for every card,the token requestor and also for the merchant while making online payments starting from July. Previously,while making any online payments credit or debit card holders used to save their card details on the merchants site as it was convenient to make payments as it saves time for future transactions. 

But saving card details online led to fraudsters stealing credentials and using it to loot money. In order to combat such online payment  scams, the RBI came up with the implementation of a tokenized system. 

However, card tokenization is not necessary, card holders can choose to have his or her card tokenized and if they choose not to then they must enter all the details every time to complete online payment till the end of June. The card tokenization is free of cost and once the tokenization of the card is done on the merchant portal, the customer will now be able to see the last four digits of the card. 

How to get Tokenized cards?

You can get the card token by initiating a request on the bank’s website or app via token requestor. Once the request has been made to the token requestor the merchant will send the request directly to the bank which issues the credit card(Visa/Mastercard/Diners/RuPay).

From the Token Requestor the party that receives the token request will create a token that relates to the card, the token requestor, and the merchant.