The banking regulator Reserve Bank of India will be initiating the new rules for online card transactions starting January 1, 2022.
With this development, e-commerce companies namely Amazon and Flipkart or online delivery food delivery apps such as Zomato, Swiggy or cab aggregators like Ola or Uber, will no longer be able to save card information of the users on their platforms.
As per the new RBI rules, customers performing online transactions on any e-commerce platform will have to enter their debit or credit card details each time starting next year, if they haven’t saved their cards on the particular app. This can be avoided if customers give their consent to the platforms to tokenise their cards.
In March 2020, RBI had issued guidelines that barred merchants from saving customers’ card details for levelling-up card security.
In September this year, the regulatory body made changes in its guidelines on card tokenisation services for improving the safety and security.
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“The tokenisation of card data shall be done with explicit customer consent requiring Additional Factor of Authentication (AFA),” RBI had said in a press release.
Tokenisation will help replace the card details with a unique algorithm-generated code, or token, that permits online purchases to go through without exposing the card details of the users.