Debit and credit card not required for online shopping from Jan 1, 2022

The way we shop through credit or debit cards at places such as Amazon, Flipkart, Myntra, BigBasket, will change from January 1, 2022. You would no longer need to save the 16-digit card number and the card expiry date on the merchant website. Debit and credit card not required for online shopping from January 1, 2022.

As per the Reserve Bank of India’s (RBI) mandate, now you could easily make a card payment through a new process called ‘tokenization’. An individual requires the card details to do online shopping and make a transaction. “The process of tokenization is simple as it requires replacing the card details with a token.

This ensures that the transactions are seamless without exposing the customers’ confidential data. The tokenization framework by RBI guides us on how these solutions are to be conceptualised and deployed. On the backend, the card’s CVV number will no longer be required for digital payments making the entire system safe and secure,” says Akash Sinha, CEO and co-founder, Cashfree Payments, a payment disbursal platform used by businesses to do bulk payouts.

On the end-user front, nothing changes. Users need to enter their card details and opt for tokenization while making online transactions at the check-out window of the shopping portal. “However, merchants will now need to forward the token to respective banks or the card networks.

A token is produced and sent back to your merchant, which then, at that point, saves it for the end-customer. As a customer you don’t have to recall the token as the experience is not going to change for you while making digital payments,” says Sinha. 

Tokenization is absolutely free for users, who can tokenize any number of cards. However, only domestic cards fall under the current guidelines. Tokenization is not applicable to international cards as of now. Customers need safety and security at any place they shop. In this time where digital fraud presents dangers all through the economy, building trust and connection with clients starts with keeping their payment and other individual information safe.

Tokenization shields businesses from the negative financial impact of data theft as even if there is a breach, the merchant would not have important data that can be stolen. Tokenization can’t shield your business from an information and data breach yet it can diminish the chances of any possible breach. “The innovation behind tokenization is crucial in many ways in which we do business transactions today.

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From secure in-store retail POS transactions to payments on the go, from conventional e-commerce to another age of in-app payments, tokenization makes paying with the gadgets simpler and more secure than at any other time,” adds Sinha. 

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Issuer bank will provide a dedicated portal (on its own bank’s website) to manage tokenized cards. Cardholders will also have the convenience to delete tokens when they want to.