Last year, the Reserve Bank of India (RBI) issued guidelines restricting merchants from storing customers’ card details on their platform. The idea was to offer a safe and secure shopping experience. In line with the same, the RBI in September announced new guidelines for customers conducting online transactions on any e-commerce platform.
As per the new rules, customers will need to enter their debit and credit card details at every checkout as their card details will no longer be saved on these platforms. However, one way to avoid the hassle of adding card details at every transaction will be solved through tokenisation.
The new RBI rules state that “the tokenisation of card data shall be done with explicit customer consent requiring Additional Factor of Authentication (AFA).” In simple words, Tokenisation is a unique algorithm-generated code or token for your card details. Token will allow customers to make easy payments on these platforms without exposing the card details.
Let’s take a quick look at how online transactions will change from January 1, 2022.
How online transactions are going to change: 10 points
-From January 1, 2022, customers will not be able to save card details on any of the e-commerce platforms including Amazon, Flipkart, Swiggy, Zomato, or any other.
-To make online transactions, customers will need to enter their card details every time they place an order.
-To avoid the hassle of entering the card details in every order, customers can tokenise their cards. To use this facility, you will need to provide consent to the e-commerce platform to tokenise your card details. Once you provide the approval, e-commerce platforms will ask the card network to encrypt details with additional factor authentication.
-Once the e-commerce platform receives the encrypted details, customers will be able to store that card for future online transactions.
-It must be noted that for now only Mastercard and Visa cards can be tokenised. As per reports, other financial services should also be able to introduce tokenisation.
-The new RBI guidelines should be applied for both credit and debit cards.
-The new rules are only for domestic transactions and not international transactions.
-If you are wondering, customers will not need to pay any extra charges for tokenisation of cards.
-Once the token is created, e-commerce platforms will show the last four digits of tokenised cards, bank name, and card network name. This will allow customers to identify them to easily identify them.
-It must be noted that tokenisation of cards is not mandatory and customers can choose to enter card details every time they make an online transaction.
The post Explained: Here’s how your online transactions will change from January 1 appeared first on BGR India.