RBI unveils new Card-on-File Tokenisation creation directly at the issuer bank level for debit and credit cards users

RBI unveils new Card-on-File Tokenisation creation directly at the issuer bank level for debit and credit cards users:

The Reserve Bank of India (RBI) has taken further measures to boost the security of online transactions. Following the introduction of card tokenisation for online safety, the bank has proposed enabling Card-on-File (CoF) token creation directly at the issuer bank level. This move will make it more convenient for cardholders to create and link tokens to their accounts on e-commerce platforms.

But what exactly does this mean for online shoppers and wandering customers? Way back in 2020, the RBI had stipulated that payment aggregators and merchants should not store actual card data, known as Card-on-File (CoF); instead, all stored card data should be tokenised. Simply, tokenisation replaces card details with a unique algorithmically generated code called a ‘token’. This token will help conduct transactions without exposing the card details.

As mentioned above, the RBI has launched new card-on-file tokenisation channels (CoFT), enabling credit/debit card users to generate tokens via their bank’s app or website.

This shift from e-commerce platforms will alleviate data security concerns related to token generation. But how? Adhil Shetty, CEO of BankBazaar.com, said, “Until now, the CoF token could be created only through the merchant’s application or webpage at the time of making a payment. As a next step, it would now be possible for users to create tokens directly at the issuer bank. The expectation is that once this is implemented, you would be able to create and manage your card tokens for the e-commerce sites directly from your bank account, pretty much like setting your credit limits and spending limits over net banking or banking apps. This gives you greater control over managing your card token and allows you to add, modify, and delete tokens remotely, without accessing the website.”