The Reserve Bank of India (RBI) has introduced new rules for online transactions that will come into effect on January 1, 2022. As per the new guidelines, all online operating e-commerce companies like Flipkart, Myntra, Zomate, Amazon, etc will not be able to save card details on their website.
Now, the users of these apps or any other platform that requires online transactions will have to enter their debit or credit card numbers every time they need to make a payment. However, customers also have an option to allow the platform to use a certain card for the payment method.
These guidelines were first issued by the RBI in March 2020 and earlier this year in September, the RBI further enhanced the guidelines where the merchants were not allowed to save card details or tokenise to improve safety and security.
Customers can tokenise their cards only with explicit consent that requires Additional Factor of Authentication (AFA).
New transaction rules issued by RBI:
– Customers will not be able to save their debit/credit cards on any e-commerce platform from January 1, 2022.
– Customers will have to re-enter all card details with every transaction they make.
– Customers do have an option of tokenising their cards for which they have to give consent. Once the consent is received, the e-commerce platform will ask the card network to encrypt details with additional factor authentication as needed.
– Once the card is encrypted, customers can save it for later use.
– Currently, only Mastercard and Visa-provided cards can be tokenised
– The RBi guidelines are for both – credit and debit cards.
– However, these guidelines are not applicable for international transactions
– The customers do not have to pay anything at all or extra for tokenising their cards
– Customers will be able to see the last four digits of their tokenised cards on e-commerce platforms for easy identification
– Tokenisation of cards is not mandatory for all transactions but can be done for a quick transaction.