The RBI’s consent for card-on-file tokenization by card networks for transactions on mobile phones, tablets, laptops/desktops, wearables, IoT devices etc. will make card-based digital payments more secure and frictionless.
Visa today launched Card-on-File (CoF) tokenization services in India in line with the recently issued RBI guidelines. Launched in partnership with Juspay, the CoF tokenization service will be available across e-commerce leaders such as Grofers, BigBasket and MakeMyTrip.
What is Card-on-File (CoF) tokenization – How does it benefit?
The RBI’s recent CoF tokenization guidelines mandate replacing the actual card data with encrypted digital tokens. These digital tokens will then be used to facilitate and authenticate transactions. According to industry experts devaluation of sensitive card details alleviates risk and reduces the vulnerability of sensitive data, as only tokens are present in transit, across the ‘in-rest’ and ‘in-use’ phases.
Experts say Card-on-File (CoF) tokenization provides two key benefits – consumer and ecosystem security and an enhanced checkout experience. Additionally, these new guidelines experts say are expected to enhance consumer trust in e-commerce payments, ensure a seamless transaction experience as well allow card issuers the comfort of authorizing a higher number of transactions.
TR Ramachandran, Group Country Manager, India and South Asia, Visa, says, “The RBI’s move to allow CoF tokenization for e-commerce payments will revolutionize digital payments across India’s e-commerce platforms. Having launched CoF tokenization services in over 130 countries globally, we are confident of the technology’s ability to build a safe, secure and seamless environment for digital payments.”
He further adds, “This will be critical in building consumer trust on merchant platforms and reassure them of the safety of their payment credentials on these platforms. We have enabled all our banking partners for tokenization and continue to work closely with merchants, payment aggregators and gateways to ready the ecosystem for CoF tokenization rollout.”
The RBI’s consent for card-on-file tokenization by card networks for transactions on mobile phones, tablets, laptops/desktops, wearables, IoT devices etc. industry experts say is aimed at making card-based digital payments more secure and frictionless.
These new guidelines come at a time when Indian consumers continue to adopt digital payment methods for daily and discretionary needs. CoF tokenization ensures more control, visibility and a consequently smoother transaction experience, along with high payment success rates.