Credit and debit card rules are changing from October 1, this new system will be applicable
The rules for online payments for debit and credit cards are going to change from October 1, 2022, as the Reserve Bank of India (RBI) card-on-file (CoF) tokenization norms will come into effect. The RBI rules are set to ban any platform for saving card details of users to protect information about fraud and theft of customers’ cards. Earlier RBI’s deadline was July 1. However, it was postponed till 1 October. The move is expected to improve the payment experience of cardholders and enhance protection against payment frauds.
What is the card-on-file tokenization norms of RBI?
Card-on-File (COF) means credit or debit card information such as numeric number, expiry date and payment gateway and stored in a database for processing future transactions by merchants. According to the RBI website, tokenization means replacing the actual card details with an alternate code called ‘token’, which will be unique to the combination of the card, token requester, card network and device. Once customers start buying an item, the merchant will initiate tokenization and ask for consent to tokenize the card. Once consent is obtained, the merchant card will send the request to the network.
