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Debit Card, Credit Card Online Payment Tokenisation Rule Ready to be Implemented, Says RBI


RBI MPC Meet: Reserve Bank of India deputy governor T Rabi Sankar on Wednesday, June 8, said that the payments ecosystem in India is ‘by and large prepared’ for implementation of the tokenisation system for card-based transactions, including online transactions. The RBI deputy governor’s comments came weeks ahead of the June 30 deadline after which the new tokenisation norms will be implemented.

“With the weeks to go for meeting the tokenisation deadline, progress has been satisfactory. About 16 crore tokens have already been created, this will pick up nearer to the deadline. Over the last several months our teams have been constantly discussing with all stakeholders to ensure that the process of tokenization is implemented smoothly,” said Rabi Sankar at a press conference after the RBI MPC meet decision announcement on Wednesday.

The payments ecosystem is by and large prepared for tokenisation, there was no need to speculate on timeline extension, he said.

“I really don’t think there is any need to speculate on whether or not the timeline will be extended. There are a few collateral issues that have come to our notice, which we will adjust as we go. These are new issues that crop up every time you shift a regime,” Rabi Sankar told reporters.

In December last year, the central bank had extended the implementation date for card tokenisation from January 1 2022 to July 1 2022. The decision was taken after requests from industry stakeholders to allow extension in the plan. The industry bodies had asked the Reserve Bank of India to extend the deadline from December 31 to a later date citing various challenges in implementing the new rule under which merchants will not be able to store credit card or debit card information of customers.

However, according to a latest report by moneycontrol.com quoting multiple sources, “banks have not yet made any representations with either the apex banking body Indian Banks’ Association (IBA), or with the RBI for another extension.”

Under the new rules, a card holder can get the card tokenised by initiating a request on the app provided by the token requestor. The token requestor will forward the request to the card network which, with the consent of the card issuer, will issue a token corresponding to the combination of the card, the token requestor, and the device.

Under the new rule, when you start purchase of an item with a merchant, the merchant will initiate tokenisation. It will ask for your consent to tokenise your card. Once you give consent, the merchant will send a tokenisation request to the card network. The card network will then create a token, which will act as a proxy to your 16-digit card number, and send it back to the merchant. The merchant will save this token for future transactions. You will also have to enter your CVV and OTP like before to approve transaction. If you want to use another card, the same process is to be followed again.

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