How will the new debit, credit card rules affect you? Details here

Through October 1, the rules for online payments for debit and credit cards will change. The Reserve Bank of India (RBI) has required that all credit and debit card data used in online, point-of-sale and in-app transactions be replaced with tokens by the date of September 30 this year. Previously, this deadline was extended by three months starting in July.

What happens after tokenization begins?

Extra layer of security for debit and credit card holders by encode is expected to enhance the user’s digital payment experience.

What is tokenization?

According to the RBI, encryption refers to replacing the actual card details with an alternative code known as a “token”.

The benefits of encryption

Cryptographic card transactions are considered more secure because the actual card details are not shared with the merchant during transaction processing.

Impact on customers on encryption

Currently, many organizations, including merchants, participate in the online card transaction chain that stores card data such as card number, expiration date, etc. [Card-on-File (CoF)] citing the convenience and comfort of cardholders when making future transactions.

While this method offers convenience, having card details with multiple entities increases the risk of card data being stolen or misused, and there have been cases where the data has been stolen or misused. Vendor hosting has been compromised.

When customers shop on an e-commerce site, they won’t be able to store the shopper’s card information in any way. When you shop online, you are asked for a 16-digit debit card number and then a CVV code. The next time you shop on the same site, you just need to enter your CVV and then the OTP generated by the bank to make the purchase.

When the new rule goes into effect, customers will have to enter their full card details when shopping online.

When a customer starts to purchase an item, the merchant will initiate encryption and ask to agree to encrypt the card. Once approved, the merchant sends a request to the card network.

Debit Credit Card Holders: Steps to Encryption

  • Visit an e-commerce website to purchase products.
  • Select preferred card options as payment method
  • Enter all required details carefully.
  • Click on the option stating ‘secure your tokens according to RBI guidelines’ on the website to generate tokens and store them according to RBI guidelines.
  • You will receive a one-time password (OTP)
  • Enter the OTP on the bank page and card details will be sent to generate the token and authorize the transaction.
  • The token will be sent to the merchant and he will save it in place of the personal card details.
  • The next time you visit the same e-commerce platform or merchant website, the last four digits of the saved tag will be displayed. This indicates that the debit or credit card is encrypted.

Customers can choose whether or not to have their cards encrypted. Those who do not want to generate tokens can continue to trade as before by manually entering the card details at the time of making the transaction.

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