From January 2022, online payment by card to change, no need to enter CVV


From January 2022, online payment by credit card, debit will be much safer because your card data will no longer be recorded on merchant sites such as Amazon, Flipkart there will therefore be no fear of data theft. Merchants and e-commerce entities typically require customers to register their card details so that payment for purchases can be made faster. This increases the risk of data theft. But now this can be avoided with the Reserve Bank of India allowing the tokenization of cards during payments.

What is tokenization?

Tokenization is the process of replacing card details with an alternate code called a “token”. This token is unique for a combination of card, token requester (the entity that accepts a request from the client for tokenization of a card and forwards it to the card network to issue a token), and the device. This system is also used to make payments at point of sale (PoS) terminals and QR code payments.

The RBI has now ordered merchants not to store card details in their system from January 1, 2022, as it has extended tokenization of file card transactions (CoF) – where card details are stored by traders. “As of January 1, 2022, no entity in the card transaction or payment chain, other than card issuers and card networks, should store actual card data. All of this previously stored data will be purged, ”the RBI said in a circular. The RBI previously banned the storage of data in March 2020, but extended the deadline until December 31, 2021.

How to tokenize cards

Cardholders can have their card tokenized by initiating a request on the application provided by the token requester. The token requester 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 requester and the device. Tokenization has been allowed through mobile phones or tablets for all use cases and channels such as contactless card transactions, payments via QR codes and apps.

Companies like Visa and MasterCard will act as token service providers (TSP) and provide the tokens to mobile payments or e-commerce platforms so that they can be used for payment for purchases instead of the card number and CVV, the three-digit number on the back of a card.

Likewise, when you enter your card details into a digital wallet like google pay”>Google pay Where Payment, these platforms will request a token from the respective TSPs. TSPs will request data verification from the customer’s card issuing bank. After verification of the data, a unique code will be generated and will remain irreversibly linked to the customer’s device and cannot be replaced. Thus, each time a customer uses their device to make a payment, the platform can authorize the transaction by simply sharing the token, without having to reveal the customer’s real data. Tokens can be generated to protect payments in mobile wallets and physical or online stores like Flipkart.


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