The Reserve Bank of India has now extended the date of tokenization of credit cards and debit cards till the month of June. This means that you will no longer need to generate tokens for the next 6 months.
A few months ago, the Reserve Bank of India in India announced the implementation of a tokenization system for debit cards and trade credit cards. However, now this date has been extended once again. The Reserve Bank of India says that we are paying more attention to the safety of the user. It is our main objective to keep user’s money safe. Then it is interesting to know why this date has been extended.
Why Reserve Bank Of India Extended Debit Card Credit Card Tokenization Date
The CIA, the largest industry body in India, said that if the tokenization system is implemented for debit cards, credit cards, it could reduce the business of the industry by up to 40%. This was increasing the pressure on the Reserve Bank of India and the Central Government. Apart from this, other people were also lobbying. Which wanted to extend the dates of this system. In fact, industrialists in India do not want the tokenization system to be implemented for debit cards and credit cards.
The Indian industry says that due to the implementation of this system, they will have to spend a huge amount of money. Which is not correct by any means.
Even before this, the Central Government and the Reserve Bank of India have pulled back all their steps. In such a situation, it will be interesting to see whether the Reserve Bank of India backtracks on this matter going forward or not.
According to the news coming in the same media, all the industrialists were lobbying together in this matter. Because of this also the Central Government and the Reserve Bank of India came under pressure.
How does the payment system work now?
If you currently buy goods from an ecommerce website, then your card details are saved there. All you need to do is enter the CVV number. Along with this you will get an OTP. And your payment becomes successful.
On the other hand, if you have taken the recurring system service, then your payment was automatically deducted from your account every month. Let us take the example of Netflix here. If you have purchased a plan of Netflix, then your payment was automatically deducted on a certain date every month. But after the implementation of the new system, this is not possible. For this reason, industrialists are continuously opposing this decision. Other similar services are also included. In which credit card bill DTH bill electricity bill etc. In which the bill was generated automatically and the money was deducted from the account.
E-commerce website score can be a loss
This move is a loss deal for those websites, which already have stored data of crores of users on their own. In which websites like Amazon Flipkart Netflix BookMyShow are included. If all this user data is deleted after the tokenization system, then it has posed a risk of damage to these websites.
Now once again the data of users will have to be stored through the token system. Due to which they are in danger of losing crores of rupees. With the loss of the same user data, their revenue is also expected to be affected. Repeated reminders will also no longer be sent. Because of which now new programs will have to be run on these websites to attract users again.
Apart from this, offers can also be made by banks and e-commerce websites to generate a token in the coming time. In this way, these websites and banks will have to spend extra money to run their ads. That includes both subsidies and advertising expenses.
How does the new Debit Card Credit Card Token System work?
But after the implementation of this new token system, a special token will be issued for you. Which will be different for each ecommerce website. This means that you will have to enter your debit card and credit card details for websites every time. Along with this, the e-commerce website will also have to use two factor authentication to confirm the payment. In which OTP or email verification is included.
If the user wants, he can make payment without token also. But for this it is necessary that he will have to enter his debit or credit card every time. Once you generate the token, you will not need to enter debit or credit card details again and again.
However, the thing to note here is that you will have to generate separate tokens for each e-commerce or online payment.
We can consider the token system as a virtual ID. Here we explain to you the virtual ID of Aadhar card. As you do not need to tell your Aadhar card number. And you can do your work only with Virtual ID. This payment system will also work in the same way. Which helps the government to keep the Aadhaar data of the people safe. However, Virtual ID has not been as successful as in the case of Aadhar card. However, it is expected to be fully successful in the payment gateway system. Because websites do not have any other option. As in the case of base.
However, now the e-commerce platform is fearing that users may not make a habit of entering their details again and again. This has put these ecommerce websites at risk. Due to which these companies can lose billions of rupees.
Why Reserve Bank of India required what token system
The Reserve Bank of India feels that the debit and credit card details of people are being stolen continuously. In such a situation, due to your details being saved on a third party website, this risk increases even more.
There are countless e-commerce websites nowadays. Which keeps on saving your data. These websites cannot be trusted. In such a situation, by implementing a token system, it wants to keep the Reserve Bank of India user data safe.
The Reserve Bank of India says that the debit and credit card data of crores of people keeps getting saved on some unknown website. It also includes payment gateway system. Where the data of almost every other person is stored. If this data gets leaked then it can be used for miss.
On the other hand, the Reserve Bank of India says that the problem is also coming to the fore due to the payment gateway. On payment through payment gateway, your payment remains with the payment gateway for 3 to 7 days. After this your payment is processed further. The Reserve Bank of India says that if someone else steals your payment from the payment gateway, then who will be responsible for it? It is not clear. In this way, Debit Card Credit Card Token System is necessary to give you a secure payment option.