Attention Credit and Debit Card holders | Is the new RBI rule beneficial for Indians?

 

Is the new RBI rule beneficial for Indians?

The use of credit cards and debit cards has become a common practice in today's time. After a few days, some of the same credit and debit card rules are going to play an important role in your life. That's why you need to know today's news. RBI is going to implement card online tokenization from 1st October. Don't get upset hearing the name.

It is believed that after the implementation of the tokenization system, the payment experience of cardholders will improve, and debit or credit card transactions will be more secure than before. You might not understand the tokenization system right now. Further in this article, we will explain to you in detail what is this tokenization. How will this new method be safe for you and you will know what is this tokenization system in this article?

According to the Reserve Bank of India, after the implementation of the new tokenization rule, whenever a customer makes a transaction on an online point of sale or app of a debit or credit card, all the details related to the account will be saved in the encrypted code. Meaning, that under this system, all companies will have to delete all existing information of card holders. 

After that this information will have to be replaced with a token and once implemented, no merchant or company will be able to save the card information. This means that the possibility of misuse of the card will be reduced. Also, online transactions will become more secure. RBI has described tokenization as a process of converting the details in your card into code. 

These codes are called tokens and will be different for each transaction. If you understand in broad words, then to get the service of a company like Flipkart or Amazon, you will have to save a unique code instead of calling details on its platform. Let us now also know the advantages of such a tokenization system. 

Often you must have noticed that when you go shopping for the first time from any platform, e-commerce companies ask you to save your card details even before using merchandise store's, websites or any app services. It stores credit and debit card data on the service's database for ease of payment.

This includes the card's number CVV and call expiry date. If seen, all these platforms increase the risk of theft of customer information, which is not right for the cardholder. Now a question also arises whether you have to pay any fees to take advantage of this system. The answer is no the tokenization system will be completely free. This arrangement will apply only to domestic card transactions.

But it will be difficult to say right now whether everyone would like to take advantage of this policy, so obviously. The question also arises whether this tokenization system will be necessary for everyone. According to RBI, the use of a token system will not be mandatory for credit and debit card users. 

In case the card users opt not to use the token system, they will have to manually enter the credit and debit card details each time. That is, whenever they do any transaction on the e-commerce or merchant website, they will have to enter the card details. Now if you want to generate a token for one last time, what will you have to do? 

Once the new rules come into force, the cardholder will have to go through the registration process once for each card. They want to use the card on any online merchant's website. Details have to be entered on all of them. Then during checkout consent to generate the token will have to be given. A token will be generated for a particular card on a website and after that, your shopping will be easy and secure.

We hope you like the information about the tokenization system then share it with your friends. It will help you easy and secure shopping and payment. If you have any questions, please comment on our site www.tradeipohub.co.in. Thanks for reading.