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Card-on-File Tokenisation

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  • Context (TH): The RBI has enabled Card-on-File-Tokenisation at the issuer bank level.
  • Tokenisation is a service where a unique alternate code is generated to facilitate transactions through cards. It involves substituting a 16-digit customer card number with a token.
  • Tokens are unique for a combination of cards, token requestors, and devices.
  • The tokenized data is stored to bill the cardholders’ accounts for future purchases.
  • The customer need not pay any charges for availing of this service.
  • Tokenisation is not mandatory for a customer, and those who choose not to let their card be tokenized can continue to transact as before by entering card details manually.
  • A customer can request for tokenization of his/her card on any number of devices.

Card-on-File Tokenisation (CoFT) Tokenisation and de-tokenization can be performed by the authorised card network or by the card issuer.

  • Benefits of tokenization: Token contains no personal information that can be directly accessed and keeps changing, making it the most secure method to complete payments.
  • Applications: Tokens can be used for online transactions, mobile point-of-sale transactions or in-app transactions.
  • Detokenisation: It is the conversion of the token back to actual card details.

RBI Guidelines on Tokenisation

  • Online payment aggregators are not allowed to store card number, CVV and expiry date for processing online transactions.
  • Single-use provision: Tokens registered on one merchant cannot be used on another merchant.
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