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RBI extends the card-on-file (CoF) tokenisation deadline
The Reserve Bank of India has recently extended the card-on-file (CoF) tokenisation deadline by 6 months to June 30, 2022.
What is Tokenisation?
- Tokenisation refers to the replacement of actual card details with an alternate code called the "token", which will be unique for a combination of card, token requestor, and device.
- It reduces the frauds that occur by sharing card details like card number and CVV.
- The token is used to perform card transactions in contactless mode at point-of-sale terminals, quick response, and code payments.
- A Card-on-File (CoF) transaction is a transaction where a cardholder has authorized a merchant to store the cardholder’s MasterCard or Visa payment details.
- The cardholder then authorizes that same merchant to bill the cardholder’s stored MasterCard or Visa account.
- E-commerce companies, airlines, and supermarket chains normally store card details in their system. The Reserve Bank has permitted card issuers to offer card tokenisation services as token service providers (TSPs). The facility of tokenisation will be offered by the TSPs only for the cards issued by or affiliated to them.
Online fraud and concerns around personal data protection is a major roadblock in India’s move towards a digital economy. In this context, discuss the major government efforts to ensure a safe digital environment for digital transactions. (250 Words)
Approach:
- Introduce by giving a definition of online fraud
- Enumerate how online fraud creates roadblocks for the digital economy
- Enumerate the steps taken by the Government to tackle the problem of online fraud
- Way Forward and Conclusion
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