Tokenised card transaction

The News

The new credit and debit card tokenization rules from the Reserve Bank of India (RBI) will be in effect as of October 1.


The term "tokenization" refers to the substitution of an alternative code known as the "token" for the actual credit and debit card information.

A 16-digit code known as a token is specific to a certain card, token requestor, and merchant.

When a card is tokenized with a merchant, the customer's actual card information is substituted with token credentials, which are only valid for that particular retailer.

Only the authorised card network is capable of doing tokenization, and only that network should be able to recover the original Primary Account Number (PAN).

To prevent anyone other than the card network from learning PAN from the token or vice versa, adequate security measures must be implemented.

Since the real card details are not given to the merchant during transaction processing, tokenized card transactions are thought to be safer.

Source: The Indian Express

Posted by V.P.Nimbalkar on 2nd Oct 2022