Banks want time for card tokenization
2021-12-21The banking regulator has instructed that only card-issuing banks and payment networks are allowed to store customer data from January 1, 2022, and all other entities in the payment chain will have to remove all previously stored data.
Most large banks and payment networks like Visa, Mastercard, and Rupay of the National Payment Corporation of India are ready to meet the deadline. However, some mid and smaller size banks are not ready and have requested the deadline to be extended.
While observing that many entities involved in the card payment transaction chain store actual card details, the RBI had said such customer details with a large number of merchants substantially increases the risk of card data being stolen.
"We have asked the members for their readiness and give us an updated status so that we can go to the RBI with correct status of our members and there is a smoother transition to tokenisation by January 1, 2022," said Vishwas Patel, chairman of the Payment Council of India, an apex body representing companies in payments and settlement system.
Tokenization is the process of replacing debit and credit card numbers with a set of characters or tokens. This is mainly done for making the payments process more secure. Tokenization is currently done by payment aggregators free of cost.
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