Launched in partnership with mobile-based payments firm, Juspay, the CoF tokenization service will be available across ecommerce companies such as Grofers, Bigbasket, and MakeMyTrip. As per Visa, the devaluation of sensitive card details alleviates risk and reduces vulnerability of sensitive data, as only tokens are present in transit, across the ‘in-rest’ and ‘in-use’ phases.
The Reserve Bank had recently issued a final circular making card tokenization mandatory from 1 January 2022. Card tokenization is a process of substituting sensitive customer data (such as card number, CVV etc.) with an algorithmically generated token (encrypted) by a token service provider, which could be the card issuer or payment networks. These tokens flow through the payment systems in a secured way without disclosing the customer details or allowing the payment intermediaries (merchants, payment aggregators) to store customer data.
According to Mint, RBI’s new guidelines are expected to enhance consumer trust in ecommerce payments, ensure seamless transaction experience as well allow card issuers the comfort of authorising a higher number of transactions.
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