Explore Our Affordable Courses

Click Here

Card Tokenisation: What is It?, Benefits and Challenges

Context:

  • According to Visa’s report titled ‘Enabling the Digital Shift: Tokenisation in India’s Economic Landscape’, India has issued over 560 million tokens over the past year.

How Card Tokenisation Reshaped India’s Payment Security

  • India issued a substantial portion of over 7.5 billion tokens issued globally, leading to card authorization rates rising by 4.5% since the introduction of tokenisation.
  • In September 2021, the RBI prohibited merchants from storing customer card details on their servers with effect from January 1, 2022, and mandated the adoption of tokenization as an alternative.

What is Card Tokenisation?

  • Reserve Bank of India (RBI) defines tokenisation as replacing actual card details (debit or credit cards) with an alternate code called the ‘token’, a unique combination of card, token requestor, and a device.
    • Card tokenisation transaction is safe as the card details are not shared with anyone, including the merchant, during transaction processing.
    • RBI has directed all sellers in India such as Amazon, Flipkart, Zomato, etc. to delete card information stored earlier to enhance the security of online transactions.
  • Token Issued By: A tokenised card will be issued by card networks like Visa, Mastercard, or Rupay.

 Card Tokenisation

  • Benefits of Card Tokenisation: 
    • Enhanced security.
    • Reduced risk of data breach. 
    • Increased trust in digital payments.
    • Improved payment experience. 
    • Reduced fraud rates.
    • Simplified compliance. 
  • Challenges of Card Tokenisation: 
    • Customer education and awareness.
    • Operational clarity of regulatory guidelines.
    • Complex integration. 

News Source: BS

 

To get PDF version, Please click on "Print PDF" button.

Need help preparing for UPSC or State PSCs?

Connect with our experts to get free counselling & start preparing

Download October 2024 Current Affairs.   Srijan 2025 Program (Prelims+Mains) !     Current Affairs Plus By Sumit Sir   UPSC Prelims2025 Test Series.    IDMP – Self Study Program 2025.

 

THE MOST
LEARNING PLATFORM

Learn From India's Best Faculty

      

Download October 2024 Current Affairs.   Srijan 2025 Program (Prelims+Mains) !     Current Affairs Plus By Sumit Sir   UPSC Prelims2025 Test Series.    IDMP – Self Study Program 2025.

 

Quick Revise Now !
AVAILABLE FOR DOWNLOAD SOON
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध
Quick Revise Now !
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध

<div class="new-fform">







    </div>

    Subscribe our Newsletter
    Sign up now for our exclusive newsletter and be the first to know about our latest Initiatives, Quality Content, and much more.
    *Promise! We won't spam you.
    Yes! I want to Subscribe.