Visa launches India's 1st card 'token' service for online platforms

Visa's card tokenization service is currently available with eCommerce platforms such as Grofers, Bigbasket, and MakeMyTrip.

"Having launched CoF tokenization services in over 130 countries globally, we are confident of the technology's ability to build a safe, secure, and seamless environment for digital payments," TR Ramachandran, Group Country Manager, India, and South Asia, Visa, said in a statement.

Tokenisation is the process of replacing credit or debit card details with a unique set of characters or a 'token' that enables payments to be processed without exposing any sensitive account details that could potentially breach the security and privacy of the consumers.

The tokenization system generates 16 random characters, called 'token', to replace the original credit card number while online shopping.

The tokenization system returns the 16-digit random characters to the e-commerce site to replace the customer's credit card number in the system.

Card-on-File (CoF) tokenization provides two key benefits -- consumer and ecosystem security and an enhanced checkout experience.

The RBI's recent card tokenization guidelines mandate replacing the actual card data with encrypted digital tokens, which are then used to facilitate and authenticate transactions.

This devaluation of sensitive card details alleviates risk and reduces the vulnerability of sensitive data, as only tokens are present in transit, across the 'in-rest' and 'in-use phases.

These new guidelines are expected to enhance consumer trust in e-commerce payments, ensure a seamless transaction experience as well allow card issuers the comfort of authorizing a higher number of transactions.

The RBI's consent for card-on-file tokenization by card networks for transactions on mobile phones, tablets, laptops/desktops, wearables, IoT devices etc. is aimed at making card-based digital payments more secure and frictionless.