RBI extends card tokenisation deadline by 6 months
Reserve Bank of India
The Reserve Bank of India (RBI) on Thursday Extended Card-on-File (CoF) Tokenisation deadline by six months to June 30, 2021. The previous deadline was December 31, 2021.
The regulator in a circular said, "In light of various representations received in this regard, we advise as under (a) the timeline for storing of CoF data is extended by six months, i.e., till June 30, 2022; post this, such data shall be purged; and (b) in addition to tokenisation, industry stakeholders may devise alternate mechanism(s) to handle any use case (including recurring e-mandates, EMI option, etc.) or post-transaction activity (including chargeback handling, dispute resolution, reward/loyalty programme, etc.) that currently involves/requires the storage of CoF data by entities other than card issuers and card networks."
The move comes after digital payment firms, like Merchant Payments Alliance of India (MPAI) and the Alliance of Digital India Foundation (ADIF), voiced their concerns over industry readiness.
The move comes after payment firms like Merchant Payments Alliance of India (MPAI) and the Alliance of Digital India Foundation (ADIF) on Wednesday urged the Reserve Bank of India (RBI) to extend the card-on-file (CoF) tokenisation deadline to December 31, 2021, for merchants. Citing several operational challenges that will hinder the transition to the token-based payments ecosystem, the industry bodies voiced their concerns over industry readiness on the RBI directive on card-on-file tokenization.
MPAI and ADIF said that 'ecosystem readiness' is a sequential process of going live with stable API (application programming interface) documentation for tokenised transactions.
The digital payments ecosystem is a long way from consumer-ready solutions and unless regulated entities are compliant, merchants will not be able to successfully process tokenised transactions, they said in the joint letter.
The RBI in September prohibited merchants from storing customer card details on their servers with effect from January 01, 2022, and mandated the adoption of CoF tokenization as an alternative to card storage.