Digital financial services company One97 Communication Limited, owner of the Paytm brand, has tokenized 28 million cards across Visa, Mastercard and RuPay, and plans to purge stored card data by June 30, the company said on Thursday. . Tokenized cards account for 80% of monthly active cards on the Paytm app, he added.
“Paytm is committed to ensuring safe and secure online payments, and in this direction, RBI’s tokenization effort is a key step for the industry. We have recognized the need for tokenized cards and have implemented the same thing on the Paytm app”, its founder and CEO Vijay Shekhar. Sharma said in the statement.
Tokenization, which aims to improve the safety and security of the payment system, refers to the replacement of the actual card details with a unique alternative code called a “token”, which will be unique for a combination of card, token applicant and identified device.
Instead of using actual card details, this token is used to perform contactless card transactions at point-of-sale (POS) terminals and Quick Response (QR) code payments.
The RBI has enabled to offer tokenized card transaction services to all channels, such as Near Field Communication (NFC), contactless transactions based on Magnetic Secure Transmission (MST), in-app payments, payments based on QR code or token storage mechanisms including cloud, secure element and trusted execution environment.
Currently, token card transaction functionality would only be offered on mobile phones or tablets and will be expanded to other devices in the future based on experience.
The RBI has stated that before providing card tokenization services, authorized card payment networks will put in place a mechanism for periodic system audits, at least once a year, of all entities involved in the provision card tokenization services to customers.
The central bank also asked card issuers to ensure easy access for customers to report a loss of “identified device” or any other such event, which could expose tokens to unauthorized use.
The RBI has set June 30 as the deadline for companies to complete tokenization.
“The company has tokenized 28 million cards across Visa, Mastercard and RuPay as part of its effort to make online card transactions safe and secure for consumers. With this rapid pace, Paytm will be able to purge data cards registered before the RBI deadline,” Paytm said. mentioned.