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January 2023

Are You Tokenised Yet?

By Yazdi Tantra, Chartered Accountant
Reading Time 4 mins
 
 
WHY? When we shop online, say on Amazon/Flipkart, we make payments, inter alia, by using our debit/credit card. We usually enter the card details, including the card number, name, expiry date and the three-digit CVV. To make it more convenient for repeat purchases, the seller/merchant asks us for our one-time permission to store the card details on their server. If you provide permission, the data is securely stored on their servers, with encryption and masking technology. Now, if their security measures are inadequate or broken-into by a hacker, your entire data, including card number, CVV, etc. is vulnerable and susceptible to misuse, which could lead to a loss up to the value of your card limits. Tokenisation is primarily designed to prevent such online or digital breaches. HOW? At the merchant’s end Since October 2022, the RBI has mandated that the merchants will not save the customers’ card numbers on their servers. Instead, they will store a generated ‘token number’ for each debit/credit card that they want to be used recurrently on their servers.
  • What it means is that a random token number will be generated
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