Abhishek012
TF Pioneer
Card Tokenization will implement next month, What do you guys think about this ?
As RBI’s
Tokenization refers to the replacement of actual card details with a unique alternate code called a token, which is unique for each combination of card, device and token requester.
Explicit customer consent requiring Additional Factor of Authentication (AFA) will be required for the same. Simply put, the merchant would ask for your consent to tokenize the card. Once you give your consent, the merchant sends a tokenization request to the card network, which then creates a token as a proxy to the card number and sends it back to the merchant.
One token is limited to just one card and one merchant. In case of multiple cards, each will have to be tokenized separately.
If you don't opt for tokenization, you would have to manually enter the card details like card number, expiry etc every time to make each online payment.
Currently, i heard very bad news from banking Industry -
1) “Currently, e-commerce platforms execute around 900-1,000 transactions per minute. During testing with tokens, merchants have been able to process only two to eight transactions per minute. The success rate of those two to eight transactions was less than 1 percent. “So, in a real-world scenario, at the current readiness, you will see only 0.05 percent of the 900-1,000 transactions going through.”
2) BOB management said, We could see some breakdown in settlements, reconciliation and services such as refunds, cash-backs and charge-backs.
3) At least a few card issuing banks, particularly public sector banks, are still working on the tokenisation infrastructure and may take time even as majority of the card acquiring banks are ready.
4) Card-based payments to at least some international merchants and small merchants could be impacted.
5) Most acquiring banks are ready with tokenisation. But not all issuing banks are prepared with tokenisation and generating tokens for their cards.
6) 70 to 80 per cent of the larger merchants are ready, about half the small and mid-size merchants are yet to get their infrastructure in place. A lot of international merchants will also be impacted.
7) The Merchant Payments Alliance of India (MPAI), whose members include digital platforms such as Netflix, Disney+ Hotstar, Spotify, Zoom, Microsoft, and Policybazaar, says the ecosystem is not ready to implement CoFT for all use-cases.
8) The MPAI has reached out to the RBI and highlighted its concern that deleting card data from all platforms in the absence of complete readiness of an alternative may cause disruptions for customers and loss of revenue for merchants.
9) Apple has already told customers that it will not accept credit and debit card payments in India and it has asked them to use net banking, United Payments Interface (UPI) or their Apple ID balance to pay for subscriptions.
10) Razorpay said it has already tested processes with Visa, Mastercard and RuPay and is fully ready. Diners Club has recently gone live on our platform and American Express will launch on our tokenisation platform soon.
As RBI’s June 30 (Extended to Sept 30, 2022) Deadline Nears, Here’s What You Need To Know & Do About Card Tokenization -
Tokenization refers to the replacement of actual card details with a unique alternate code called a token, which is unique for each combination of card, device and token requester.Explicit customer consent requiring Additional Factor of Authentication (AFA) will be required for the same. Simply put, the merchant would ask for your consent to tokenize the card. Once you give your consent, the merchant sends a tokenization request to the card network, which then creates a token as a proxy to the card number and sends it back to the merchant.
One token is limited to just one card and one merchant. In case of multiple cards, each will have to be tokenized separately.
If you don't opt for tokenization, you would have to manually enter the card details like card number, expiry etc every time to make each online payment.
Currently, i heard very bad news from banking Industry -
1) “Currently, e-commerce platforms execute around 900-1,000 transactions per minute. During testing with tokens, merchants have been able to process only two to eight transactions per minute. The success rate of those two to eight transactions was less than 1 percent. “So, in a real-world scenario, at the current readiness, you will see only 0.05 percent of the 900-1,000 transactions going through.”
2) BOB management said, We could see some breakdown in settlements, reconciliation and services such as refunds, cash-backs and charge-backs.
3) At least a few card issuing banks, particularly public sector banks, are still working on the tokenisation infrastructure and may take time even as majority of the card acquiring banks are ready.
4) Card-based payments to at least some international merchants and small merchants could be impacted.
5) Most acquiring banks are ready with tokenisation. But not all issuing banks are prepared with tokenisation and generating tokens for their cards.
6) 70 to 80 per cent of the larger merchants are ready, about half the small and mid-size merchants are yet to get their infrastructure in place. A lot of international merchants will also be impacted.
7) The Merchant Payments Alliance of India (MPAI), whose members include digital platforms such as Netflix, Disney+ Hotstar, Spotify, Zoom, Microsoft, and Policybazaar, says the ecosystem is not ready to implement CoFT for all use-cases.
8) The MPAI has reached out to the RBI and highlighted its concern that deleting card data from all platforms in the absence of complete readiness of an alternative may cause disruptions for customers and loss of revenue for merchants.
9) Apple has already told customers that it will not accept credit and debit card payments in India and it has asked them to use net banking, United Payments Interface (UPI) or their Apple ID balance to pay for subscriptions.
10) Razorpay said it has already tested processes with Visa, Mastercard and RuPay and is fully ready. Diners Club has recently gone live on our platform and American Express will launch on our tokenisation platform soon.
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