How Online Card Payments Will Change In India Starting January 2022
India is changing the way online payments are made in the country. Starting January 2022, online payments that use debit and credit cards are set to change tremendously. New guidelines by the Reserve Bank of India, India's central bank authority and the regulatory body of the Government of India's Ministry of Finance change things for all card payments.
For starters, e-commerce giants like Amazon and Flipkart will no longer be allowed to store details of your card that help with faster transactions.?Instead, card details will be replaced with a unique token which will essentially remove the need to store card details on any e-commerce portal. The unique token will be generated from a combination of factors in real time - including the relevant card, the token requester (explained below) and the device from which the request is being placed.
The token requester accepts requests from customers to create a token for a particular card transaction, which is then carried forward to the card network.?This mechanism is also used to carry out transactions for QR Code payments as well as point-of-sale terminals (hardware used to carry out card transactions at retail stores).
How token transactions will work
1. The user will initiate a request on the application provided by a token requester.?
2. Tokenisation may be done on either mobile phones or tablets as per RBI guidelines. This includes all transactions for contactless cards and payments made through QR codes.
3. Card companies like Visa and Mastercard will function as Token Service Providers (TSPs) and will be responsible for providing the tokens to e-commerce platforms or to allow any mobile payments.
4. These tokens will replace the need for sharing one's card number and CVV details.
5. When you're attempting a transaction across different digital platforms and wallets, respective token providers (Visa, Mastercard, etc.) will be asked for a token and will verify it with the user's bank
6. After verification of data, a unique code will be generated which cannot be changed and will be irreversibly linked to the user's device.
7. Making multiple payments using the same device? Worry not, all platforms will be able to authorise the payment by simply sharing the token.
8. This process will eliminate the need to share user data every time a transaction is initiated, making the process faster and also safer
While these radical changes make it seem that the process will become a lot easier, its implementation will decide the safety as well as the efficacy of the process.
Do you think removing the card from card transactions is a wise move? Share your thoughts with us in the comments below. For more science and technology news, keep reading Indiatimes.com.??
