Two industry associations — Merchant Payments Alliance of India (MPAI) and Alliance of Digital India Foundation (ADIF) — on Wednesday said they have requested the Reserve Bank of India (RBI) to extend the December 31 deadline for implementation of norms related to tokenisation of card transactions.
MPAI is a consortium of merchants who accept digital payments and counts Microsoft, Netflix, Spotify, Zoom, BookMyShow, Disney+Hotstar, Future Generali, Policybazaar and Times Internet among its members. Alliance of Digital India Foundation (ADIF) is a think-tank for digital start-ups, whose members include Paytm, Matrimony.com, GOQii and MapmyIndia.
The two associations have written to the RBI requesting an extension of the December 31 deadline while highlighting the operational challenges associated with the transition. “Merchants cannot start the testing and certification of their payment processing systems until banks, card networks, and PA/PGs (payment aggregators/ payment gateways) are certified and live with stable APIs (application programming interfaces) for consumer-ready solutions,” the letter said.
The letter has sought a phased implementation of the new mandate, a minimum time frame of six months for merchants to comply once banks, card networks, and PA/PGs are ready, as also the spread of consumer awareness about the impact of the policy change.
The central bank’s September 7, 2021 circular mandated that with effect from January 1, 2022, no entity in the card transaction or payment chain, other than the card issuers and card networks, shall store any actual card data. Instead, such data will have to be converted into unique alternative codes, called tokens. The guidelines also require any card data stored previously to be purged, effective January 1.
Meanwhile, some large merchants have already asked their customers to move to the tokenisation framework. These include the Indian operations of Uber and Zomato. Mastercard and Google Pay have tied up to offer tokenisation services and allow the app’s users to pay with their cards without having to share their credentials with a third party. On Wednesday, PG service provider Pine Labs announced the launch of a tokenisation solution that works across leading card networks.