The feature applies to tokenised credit and debit cards and is only available for domestic transactions in India. When a user tokenises their card, it is secured with a unique code and transactions are completed using a two-factor authentication process, which does not require the 16-digit card number or any other card details. The new authentication method protects users from cyber fraud as the token cannot be used on another platform.
Merchants such as Zomato and Razorpay are already using the new CVV-free service offered by Visa. The move comes as Visa’s other service, Visa Safe Click, has been paused due to regulatory pressure to tighten security standards. Visa Safe Click was launched with the aim of eliminating the need for CVV and OTP authentication for transactions below USD 24.45, but it has been put on hold for the time being. If the regulator approves, both services may be merged by Visa.
According to NPCI, the total number of UPI transactions in India in 2022 jumped 91.11% YoY, and the value of UPI transactions saw a 74.83% year-on-year increase in 2022. With the increasing popularity of UPI payments, Visa’s new CVV-free service for tokenised cards is likely to be well-received in India, as per the press release.
Tokenisation is a data security process that involves replacing sensitive information, such as credit card details, with a unique code, called a token.
Key points about tokenisation:
Tokenisation helps to protect sensitive data from cyber attacks and fraud by using a unique token that cannot be used for any other purpose;
Tokenisation is widely used in the payment industry to secure online transactions, where sensitive data needs to be shared between different parties;
Tokenisation can be used for various types of data, including credit card numbers, bank account numbers, and personally identifiable information;
Tokenisation is often combined with other security measures, such as two-factor authentication, to provide enhanced security for users;
Tokenisation can be done on-premises or in the cloud, depending on the specific use case and security requirements.
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