New Delhi: Most of the large merchants have complied with RBI’s card-on-file (COF) token norms and 195 crore tokens have been issued so far. RBI had directed traders to implement its tokenization norms by June 30, 2022. The central bank has extended its implementation deadline twice in the past.
Card-on-file or COF refers to card information stored by payment gateways and merchants for processing future transactions.
According to sources, the system is quite well built as most of the big traders have already adjusted.
Sources said some of them are in the process of doing it, while for some foreign entities the business may not be big enough to focus on these changes.
He said that around 195 crore tokens have been issued so far and it is increasing regularly.
Under token services, a unique alternate code is generated to facilitate transactions through the card.
RBI last September prohibited merchants from storing customer card details on its servers with effect from January 1, 2022, and mandated the adoption of COF tokens as an alternative to card storage.
The basic objective of tokenization is to enhance and improve customer security. With tokens, the storage of card details is limited.
In March 2020, the RBI stipulated that authorized payment aggregators and merchants onboarded by them should not store genuine card data in order to reduce weak points in the system. At the request of the industry, it extended the deadline to December 2021 as a one-time measure.
However, the card data will be tokenized with the explicit consent of the customer, which will require an additional factor of authentication (AFA).
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