The rules for card tokenization will take effect on July 1, 2022.
For all credit and debit card holders, there will be some good news soon: starting July 1, 2022, internet businesses will no longer be able to store client card data.
Last year, the Reserve Bank of India (RBI) introduced debit and credit card tokenization laws to ensure client safety. Merchants were prohibited from retaining customer card data on their systems under the restrictions.
From July 1, 2022, these card tokenization standards will be in place
For domestic internet purchases, the RBI mandated the use of card-on-file tokens. The deadline for card token adoption in the United States has been extended by six months, from January 1, 2022 to July 1, 2022.
To assist clients in making safe transactions, it will be saved as an encrypted “token.” These tokens will enable payment without revealing client information. The replacement of the original card data with an encrypted digital token is required under RBI rules.
As a result, beginning July 1, 2022, businesses will be required to remove consumer debit and credit card information from their records.
The use of a card tokenization system is optional. If a client does not consent to the tokenisation of his or her card, he or she will be required to provide full card details, such as name, card number, and card validity, every time they make an online payment, rather than the card verification value or CVV.
At the same time, if a consumer agrees to card tokenisation, he or she will only be required to provide the CVV or one-time password (OTP) details during the transaction.
The tokenisation method is completely free of charge, and it allows for a smoother payment experience while still protecting the data on one’s card.
Furthermore, tokenization is limited to domestic internet transactions
According to the RBI, a tokenisation request can only be registered with the explicit approval of the customer via Additional Factor of Authentication (AFA), not by a forced, default, or automatic selection of a check box, radio button, or other option.