RBI will not extend card tokenization beyond September 30 despite merchants’ concern

The September 30 deadline for banks and merchants to enhance the security of customers’ credit card data is less likely to be extended by the Reserve Bank of India (RBI). Banks and merchants say that there are some apprehensions of failure of payments and loss of revenue if this system is implemented.

Reuters quoted sources in banking and merchants with knowledge of the matter. Told That despite requests from many merchants to extend the date of implementation of this rule, RBI has not given any positive signal about it. “Banks, card networks and big merchants are ready for this. So there is not much pressure to extend the deadline. We haven’t even got any indication about it. If it happens, then there is no indication,” said an official of a large state-run bank. It would be surprising.” RBI did not get any reply to the email in this regard.

About three years ago, a plan was made to tokenize cards to enhance the security of card data in the country. The deadline for this is 30 September. Tokenization is a process whereby card details are replaced by an algorithmically generated unique code or token. With this, online purchases can be made without giving card details. RBI has extended the deadline for card tokenization several times and ordered all companies to delete all credit and debit card data from their systems with effect from October 1 this year.

This rules Banks, card companies and large retailers are ready to comply, but small merchants may find it difficult. These merchants say that they may incur revenue loss in the short-term. Merchant associations have contacted RBI requesting some postponement of this deadline. Some merchants and bank officials are apprehensive that the card-linked transactions may come down in the short-term once the tokenization rule is implemented. Some experts say that apart from the payments, there could be some other problems as well. These include returning the product as the merchant will not have the card data. <!–

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