The data that you share with banks, financial institutions, and digital platforms including apps and websites is protected with robust security measures. The Reserve Bank of India (RBI) is driving the change to take this security one step further. In an attempt to minimise any risk of fraud, on January 8, 2019, the RBI issued a notification allowing card-issuing companies to offer tokenisation and de-tokenisation services to their customers. Tokenisation essentially secures your card details when you make merchant payments online. Read on to know more about what tokenisation is and how it works.
Tokenisation - meaning
Tokenisation is a security measure wherein your existing card details get replaced with a unique code referred to as a token. Tokenisation is used on e-commerce platforms, food delivery apps, and across the digital payment spectrum where you are required to enter your card details. These platforms hold sensitive data like your Debit Card and Credit Card numbers, expiry dates, etc. Tokenisation ensures that your card details are protected and safely stored with the bank or network (Visa/MasterCard/Diners Club/Rupay)
How does tokenisation work?
With tokenisation, you continue to transact online like you always do. The only difference is that the merchant cannot see your card details. Following is a brief behind-the-scenes of how tokenisation enables payments.
When you opt for card tokenisation, the card-issuing company assigns a unique token against the card which is then stored at the merchant’s end.
When you initiate a card transaction, the merchant transmits this saved token to your card issuing company.
Your card issuer checks whether the card number corresponding to the token number has sufficient balance.
If yes, your card issuing company allows the transaction, and the merchant receives the payment.
Tokenisation in India
The RBI issued a notification that from October 1,2022, merchants can no longer store customers’ card details. Merchants can only store the last four digits of the card and the customer’s name. Here are some RBI guidelines regarding tokenisation that you ought to know.
Tokenisation is a completely voluntary facility where explicit customer consent is required through the Additional Factor of Authentication (AFA). Without tokenisation, merchants cannot store your card data and you have to enter your card details repeatedly while shopping.
You can tokenise multiple cards in one application. You can set and modify per transaction and daily limits for tokenised transactions.
Also, your card company can decline your tokenisation request if they find anything risky.
The customer can also choose to suspend the token at a particular merchant or at all merchants by requesting the same with their card-issuing companies. The card-issuer removes the token(s) linked to your card details, and will require you to enter the card details manually going forward.
You can read more about the RBI guidelines on tokenisation here.
Tokenise your HDFC Bank Debit and Credit Cards
Card tokenisation is a one-time process offered by HDFC Bank. Here’s how it works.
Let’s say you are buying groceries through a mobile app. During the checkout process, you enter your HDFC Bank Credit Card or Debit Card details to make the payment.
You will receive a notification stating, ‘Secure Your Card’, ‘Verify Card’, etc. which you will need to tick to provide consent for tokenisation
The mobile app will ask you to enter your CVV, and you will receive an OTP on the registered mobile number.
After you enter the OTP, your card is saved and tokenised.
Post tokenisation, in the ‘Saved Cards’ section of the mobile app, you can only view the last four digits of your HDFC Bank Cards.
Apply now here for HDFC Bank Credit Cards and benefit from state-of-the-art digital security and great offers on purchases that you make online! Pre-approved Credit Card holders can get their cards by applying here.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.