Online merchants may lose up to 40% of revenue after December 31 due to tokenization of user card information

Industry body CII said online merchants could lose up to 20-40 per cent of their revenue after December 31, after which merchants would no longer be able to store users’ card information and each card number would have to be replaced with a random token number. Wednesday.

This was brought up in a virtual session on ‘Digital Payments and India Media Consumer’ which was organized by the Media and Entertainment Committee of CII.

The objective of the session was to bring to light the problems being faced by the consumers from next year. reserve Bank of India The deadline for the token is December 31, CII said in a statement.

This means that from January 1, merchants will no longer be able to store user card details and will have to replace each card number with a randomized token number.

“Online merchants can lose up to 20-40 per cent of their revenue after December 31, and for many of them, especially the smaller ones, it will sound the death knell, forcing them to shut shop.”

Sijo Kuruvilla George, Executive Director of Alliance of Digital India The Foundation (ADIF) said that traders will lose out on no fault of theirs in the process and that they cannot create token infrastructure under RBI regulations.

George said the tech integration, loss of revenue and customer education were taking a toll on the merchant, and that he didn’t have the time to do it all due to a lack of upstream preparation or commitment in the matter.

CII said there are an estimated 985 crore cards in India, which are used for around 1.5 crore daily transactions worth Rs 4,000 crore.

The Indian digital payments industry was valued at Rs 14,14,85,173 crore in 2020-21, as per RBI’s annual report, adding that digital payments have driven economic growth and development especially through the times of pandemic. There has been continuous economic development. ,

It added that the Reserve Bank of India (RBI) intends to protect consumer interests, but the challenge at the grassroots level pertains to implementation.

For a tokenized solution to be consumer-ready (i.e. for consumers to be able to successfully complete transactions using tokens instead of their card information), the solution should have completed three phases, it said.

Steps include token provisioning and token processing and scale-up for multiple use cases.

“However, India is nowhere close to completing these three phases, and rushing with tokens without adequate system preparedness is going to have a negative impact on transactions,” it said.