Tokenisation will help bring huge value to the digital payments space, and is likely to gain momentum in the coming months, said Ravi Varma Datla, Mastercard‘s vice president – digital products, South Asia.
Last month, the Reserve Bank of India issued guidelines, allowing card-on-file tokenisation. Tokenisation helps consumers to enter and save a 16-digit token on e-commerce or merchant platforms, instead of storing their card details.
“Card-on-File tokenisation enhances the safety and security of the entire transaction value chain in e-commerce payments. It builds trust and can significantly increase convenience for consumers and create efficiencies for merchants. It means there is no need for a consumer to enter his card number every time he transacts, or to login to an online shopping account to update their details due to redundant card credentials,” Datla said.
Last week, National Payments Corporation of India (NPCI) announced the tokenisation system for RuPay cards. The NPCI Tokenisation system will support tokenisation of cards as an alternative to storing card details with merchants.
“We are confident that the NPCI Tokenisation System (NTS) for the tokenisation of RuPay cards will instill further trust in the millions of RuPay cardholders to carry out their day-to-day transactions securely,” said Kunal Kalawatia, chief of products at NPCI.
Also read: What is tokenisation, and how can it ensure safe transactions?
When buying a product or service online, consumers are usually forced to store their credit or debit card details. This is where tokenisation plays a significant role in ensuring consumers’ safety.
“What makes this type of token unique is that it can be used just like your normal card for online payments but only by the merchant that requested it. This means that if a bad-guy or hacker gets their hands on a token – it simply cannot be used. For the sake of identification and reconciliation, RBI has permitted merchants to display the last 4 digits of the original card number to the consumers,” Datla said.
Datla added that as of today, customers have no single view of all the merchants where they have saved their card number. With tokenisation, customers can reach out to their respective banks and view the list of all the tokens saved at merchants and also request to delete or update them.
Recently, Visa launched its card-on-file tokenisation service in India. The company has enabled its tokenisation services across 130 countries. As a large number of shoppers make the shift to online payments, Sujai Raina, Visa’s India business development head, believes it will ensure a frictionless checkout experience for consumers, and drive higher payment success rates for merchants and issuers.
“We believe the RBI’s directive to roll out card-on-file tokenisation in addition to the earlier device-based tokenisation protocols, will help build a safe, secure and seamless environment for digital payments, thus enhancing consumer trust across digital platforms,” he said.
When asked Mastercard about its plan to launch its tokenisation services in India, Datla said the company is working with its partner banks, merchants, payment aggregators, and other stakeholders towards a smooth rollout.
So far, Mastercard has rolled out tokenisation for consumers in over 2,500 banks across the globe. The company has found that the tokenisation has enabled a safer payment ecosystem, and has also increased transaction volume across the digital channel to return greater revenue for merchants, Datla said.
Datla also believes that tokenisation will help make digital payments seamless. “By replacing sensitive payment data with digital tokens, a superior ecommerce experience is created which provides increased security, approval rates and a frictionless consumer experience,” Datla said.
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