RBI Unveils Seamless Card-on-File Tokenisation with Banks - Current Affairs Explained
RBI Unveils Seamless Card-on-File Tokenisation with Banks - Current Affairs Explained
The Reserve Bank of India (RBI) has recently unveiled a significant development in the realm of digital transactions with the introduction of the Card-on-File (CoF) tokenisation facility through banks. This move is aimed at enhancing the convenience for cardholders and bolstering the security of online transactions. Here's everything you need to know about this latest development:
1. What is Card-on-File Tokenisation (CoFT)?
Card-on-File Tokenisation (CoFT) is a security feature introduced by the RBI, allowing cardholders to create and link tokens to their existing accounts with various e-commerce applications. This innovative measure replaces actual card details with token credentials for added security.
2. What is the Objective Behind CoFT?
The primary objective is to enhance convenience for cardholders. By enabling the generation of CoF tokens directly through banks, the RBI aims to streamline the tokenisation process and provide an additional layer of security for online transactions.
3. How Does Tokenisation Enhance Security?
Tokenisation replaces sensitive card details with a unique 16-digit token that is specific to a combination of the card, token requestor, and merchant. This adds an extra layer of security, making it harder for unauthorized entities to access or misuse card information.
4. How Can CoFT be Implemented Through Banks?
CoFT generation can be done through mobile banking and internet banking channels provided by the card issuer. This ensures that the process is seamless and accessible to a broad spectrum of cardholders.
5. What is Customer Consent and AFA Validation?
CoFT generation requires explicit customer consent and Additional Factor of Authentication (AFA) validation. This ensures that the tokenisation process is initiated with the cardholder's knowledge and involves an additional layer of security.
6. Is there Flexibility for Cardholders in Tokenisation?
Yes, cardholders have the flexibility to tokenise their cards at their convenience, whether at the time of receiving a new card or later. The emphasis is on initiating the process only with customer consent.
7. How Does AFA Validation Work for Multiple Merchants?
If a cardholder selects multiple merchants for tokenisation, AFA validation may be combined for all these merchants. This streamlines the process while maintaining the necessary security measures.
8. What Information Should Card Issuers Provide?
Card issuers are required to furnish a complete list of merchants for whom they can offer tokenisation services. This transparency ensures that cardholders are well-informed about the options available to them.
9. What is the Evolution of Tokenisation in India?
Tokenisation has evolved as a recognized security-enhancing measure in digital transactions. Its implementation has contributed significantly to improved transaction security and approval rates.
10. When was CoFT Initially Introduced?
The RBI introduced Card-on-File Tokenisation in September 2021, with the implementation starting from October 1, 2021. Since then, the system has been gradually gaining traction and positively impacting the digital payment landscape.
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