Explainer: RBI’s New Rules For Online Payments From Jan 1; What It Means For You

New Delhi: Starting January 1, e-commerce companies cannot store your Debit/Credit card details, under new Reserve Bank of India (RBI) rules. To make online payments, you have to choose one of the following two ways:

One: Tokenisation.

Two: Or, enter your 16-digit card number every time you make an online payment.

What is tokenisation?

Your card details will be replaced by a unique token, generated by computer algorithm. ‘Tokenisation’ of card data will be done with explicit customer consent requiring Additional Factor of Authentication (AFA). The token will allow you to make online payments without disclosing card data.

Online payment by tokenisation

* You initiate online payment

* e-commerce company initiates tokenisation by seeking your consent

* After your consent, tokenisation request is sent to card service provider, which creates a token.

* e-commerce company saves token for future transactions.

* You approve transactions with CVV, OTP


Each time you make an online payment, you key in your 16-digit card number.

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