RBI extends implementation of card tokenisation norms by 3 months; deadline extended till 30 September
RBI on Friday announced extension of its tokenisation norms from an earlier June 30, 2022 deadline by three more months to September 30, 2022. The step was taken after consultation with the stakeholders and to avoid disruption and inconvenience to cardholders
Reserve Bank of India (RBI) on Friday announced extension of its tokenisation norms from an earlier June 30, 2022 deadline by three more months to September 30, 2022, an RBI release said. The step was taken after consultation with the stakeholders and to avoid disruption and inconvenience to cardholders, the release said.
This extended time period may be utilised by the industry for facilitating all stakeholders to be ready for handling tokenised transactions, the release said. The period must also be used for processing transactions based on tokens, the release further said.
The RBI release said that the tiime period given by it must also be used for implementing an alternate mechanism(s) to handle all post-transaction activities (including chargeback handling and settlement) related to guest checkout transactions, that currently involve /require storage of CoF data by entities other than card issuers and card networks; and (d) creating public awareness about the process of creating tokens and using them to undertake transactions.
The move came in the wake of industry stakeholders highlighted certain issues related to implementation of the framework in respect of guest checkout transactions. Also, number of transactions processed using tokens is yet to gain traction across all categories of merchants, the RBI reasoned for extending the timeline.
RBI mandated that after December 31, 2021, entities other than card networks and card issuers cannot store card data. This timeline was subsequently extended to June 30, 2022.
A framework for CoF Tokenisation (CoFT) services was also issued. Under this framework, cardholders can create “tokens” (a unique alternate code) in lieu of card details; these tokens can then be stored by the merchants for processing transactions in future.
Till date, about 19.5 crore tokens have been created. Opting for CoFT (i.e., creating tokens) is voluntary for the cardholders.
See Zee Business Live TV Streaming Below:
Why RBI brought tokenisation norms?
"Currently, many entities, including merchants, involved in an online card transaction chain store card data like card number, expiry date, etc. [Card-on-File (CoF)] citing cardholder convenience and comfort for undertaking transactions in future. While this practice does render convenience, availability of card details with multiple entities increases the risk of card data being stolen/misused. There have been instances where such data stored by merchants, etc., have been compromised. Given the fact that many jurisdictions do not mandate Additional Factor of Authentication (AFA) for authenticating card transactions, stolen data in the hands of fraudsters may result in unauthorised transactions and resultant monetary loss to cardholders. Within India as well, social engineering techniques can be employed to perpetrate frauds using such data.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
80% return in one year: Brokerage suggests buying this Maharatna PSU stock for 2-3 days, check target
5 investment schemes that provide monthly pension to senior citizens fixed deposit fds savings scss guaranteed return atal pension yojana post office monthly income swps mutual fund
Akshaya Tritiya bank holiday or not Basava Jayanti 2024 festival date Banks closed or open tomorrow may 10 friday check out state-wise full list
11:05 AM IST