Card Tokenization can enhance customer confidence on digital payments, also making payment transaction convenient. Elaborate (200 Words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 4 years
KEY POINTS
· Tokenisation is a process of replacing sensitive data with non-sensitive data. In payments cards industry, it is typically used to replace cardholder’s card number (i.e., PAN) with a surrogate value called a ‘token’.
· Tokenisation provides for both convenience and security of payment transactions. The concept has been widely adopted in the payment card industry globally.
· The increasing adoption of digital payments begets demands for further improving convenience, resilience, security, real-time and cost.
· Multiple methods of tokenisation exist within payments and vary depending on the parties in the payment ecosystem (merchants, acquirers, card networks or issuers).
· In merchants’ or acquirers’ tokenisation method, sensitive card information is stored in a secured vault and a token is used for processing payment transactions within their environment.
· Tokenisation can be implemented using a variety of storage mechanisms viz. device-based, cloud based, app-based and card-on-file (CoF) and payment channels like NFC, MST, in-app, QR code, etc.
· RBI laid down directions for card tokenisation whereby, as an initial step, card-network-enabled tokenisation was allowed through mobile phones and tablets.
· The new extension has enabled the industry to offer tokenisation service benefits of enhanced security, reduced fraud risk and less payment disruption (also read dropouts) across a wide variety of use cases.
Nivetha 4 years
Please review
IAS Parliament 4 years
Try to provide specific examples, avoid writing generalized points. Keep Writing.
Manish 4 years
Please review..
IAS Parliament 4 years
Try to include data to support your arguments. Keep Writing.
