New rules for payment service providers for ‘Tokenisation’
Team Ambitiousbaba and AB are here with a Current Affairs Special Series. In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack in any current affairs topic. Today’s Current Affairs topic is “India’s leading role and semi-conductors shortage”
The Reserve Bank of India (RBI) has demanded all merchants to need not save customer details of debit and credit cards on their websites to enhance data security while proposing them the tokenisation option under which card details will get coded by a unique code or token generated by an algorithm.
The new rules which will effect from January 1:
- All card information stored with Merchants and payment gateways will have to be deleted on their servers.
- User who wants to make payments on merchant websites will have to fill all card details. Many lenders informed their customers about the changes that will come into effect from January.
- On the first payment to any merchant user requires giving consent with an additional factor of authentication. The user could complete the payment by entering the card’s CVV and OTP (card verification value and one-time password).
What is Tokenisation?
It relates to the alternate of the actual card details with an alternative code called the “token”.
It will grant online purchases to complete the process without exposing sensitive information to cyber criminals.
Safety of Tokenisation:
As per the official information by the Reserve Bank of India, tokenisation which is a tokenised card transaction is conceived safer as the actual card details are not shared with the merchant during the process of the transaction.
The actual card data such as token and other relevant details will be keeping away in a secure mode by the authorised card networks. The token requestor cannot stock Primary Account Number (PAN), that is, card number, or any other card detail. Card networks are also prescribed to get the token requestor certified for safety and security that adapt to international best practices.
The central bank also said that transition of the token back to actual card details is known as de-tokenisation. RBI has also directed that the customer cannot be charged for availing this service.
Question & Answer:
Q1. From which date tokenisation for all online payment would be effective?
Ans. 1st January, 2022
Q2. What is the full form of ‘PAN’?
Ans. Primary Account Number
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