RBI allows tokenization in Card-on-File services
- The Reserve Bank of India has made the following two enhancements in the card tokenization services:
- First: the device-based tokenization framework will now be applicable to Card-on-File Tokenisation (CoFT) services as well. Card-on-File (CoF) means that the Credit/Debit card details are stored by merchants for ease of payment. However, since storing card details online could be dangerous since there is a possibility of data hacking, RBI has now allowed tokenization of Card-on-File (CoF), i.e. the original card details will not be stored by the merchant and card details will be stored in token form.
- Second: RBI has allowed card issuers (banks) to offer card tokenization services as Token Service Providers (TSPs). The tokenization of card data shall be done with explicit customer consent requiring an Additional Factor of Authentication (AFA).
- Token Service Provider (TSP) refers to the entity which tokenizes the actual card credentials and de-tokenizes them whenever required. Earlier only card networks (like VISA, Mastercard) were allowed to act as TSPs. So now banks can act as TSPs.
Points to remember:
- Full form of CoFT and CoF
- ________ is an entity that tokenizes the actual card credentials and de-tokenizes them?- TSP
- Full form of TSP
Source: RBI