- Date : 30/09/2022
- Read: 2 mins
New Credit card and Debit card rules from 01st October!
The rising risk of cyber security is creating a need for safe and secured transactions. In line with this policy, the RBI has issued new guidelines to be effective from 1st October. The new rules are applicable to all credit card and debit card transactions. The RBI has asked the banks to create tokens for all transactions.
Tokenisation is the process by which the credit card and debit card details will be replaced by a token. The token will be issued by the bank. The token will be used to complete the payment, and the card details will not be shared with the merchant. The name on the card, expiry date, card number and CVV number will be masked. Therefore, the security of the card will be enhanced. The reason for the move is to make electronic payments safe, convenient, quick and affordable.
The token-based transactions will be safer as the card details will not be shared with the merchant. The entities cannot misuse the card details. The card issuer’s name and the last four digits of the card will be visible to the merchant. As per the details shared by the RBI, the number of frauds and disputes should come down substantially post the execution of tokenisation.
How should you get a token?
The first step is to secure your credit card as per the tokenisation procedure of the bank. Then, you will receive an OTP to authenticate the transaction, and the merchant will receive the unique token generated by the bank. The merchant can save the token along with the customer’s contact details to safeguard the transaction in case of a failure.
Paytm, as per reports, has already tokenised 52 million cards so far. PayU has also secured 50 million cards as of now. PhonePe has tokenised some 15 million cards so far. The RBI guidelines will speed up the process and secure the transactions.
The move buy the RBI is expected to make card transactions safer, faster and more secure. The new guidelines are applicable from 01st October, and the guidelines will change the payment process. The merchant will get a unique token, and the card details will be masked from the merchant. Also read, How is credit card interest calculated?