- More time to implement the tokenization system
- RBI extends for another six months
Based on the various responses and complaints received in this regard, the deadline for implementation of the scheme has been extended to June 30, 2022. The RBI had earlier said that tokenization would help prevent data leakage and avoid the hassle of collecting customer card information. The system will also help to avoid repetitive e-mandates.
Companies that provide debit and credit card services are required to create a new code to replace card information. But most banks are not ready for this change. The main concern was that traders would lose 20 to 40 per cent of their revenue as banks were not ready to implement the system. Now if a customer swipes the card and makes a cash transaction, all they have to do is enter the card details once. Online sites do not have to provide information including card number again and again when purchasing goods. This is because companies collect customer information.
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All online sites collect customer information when purchasing goods and swiping cards by entering debit and credit card information online. With the introduction of the new system, customers will no longer be able to store their card details without permission. Information such as card number, CVV number and card validity is now required when making payments through cards. Instead you have to enter a digital code or token.
Allowing six more months to implement the system will help alleviate the concerns in this area. Card service providers also get more time. From January 1, 2022, the RBI had barred merchants from collecting customer card information. The announcement was made in September.
But more time is allowed in situations where implementing the system without adequate preparation may do more harm than good. At present, measures that cause loss of revenue to traders cannot be encouraged.
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