New Rbi Rules on Online Transactions: Online payment rules going to change from January 1, card details will not be saved, RBI’s decision – new rbi rules starting january 1st will effect on online card transaction

New Delhi. According to the new guidelines of the Reserve Bank of India (RBI), from January 1, 2022, e-commerce companies like Amazon and Flipkart or online food delivery companies like Zomato will not be able to save card information on their platform. According to the new rules of RBI, customers will have to enter their debit or credit card details every time they do online transactions on any e-commerce platform. Customers can approve the platform to tokenize their cards if they want to avoid the hassle of entering bar details.

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As per the guidelines issued by RBI in March 2020, this move restricts customers’ card details from being saved by merchants to promote security. But in September this year, the regulatory body has extended its guidelines on card tokenization to improve security and safety. RBI said in a press release that ‘Tokenization of card data will be subject to customer approval, which will require Additional Factor of Authentication (AFA).’ Tokenization helps to replace the card details with a unique algorithm generated code or token, allowing online shopping without exposing the card details.

Here’s how it will impact a regular customer:
Customers will not be able to save their debit or credit card details on the e-commerce platform from January 1, 2022.
Customers will have to re-enter the card details every time they make an online transaction.
But customers can give their approval to e-commerce companies to tokenize their cards to avoid this recurring problem. After getting the customer’s approval, the e-commerce platform Card Network will be asked to encrypt the details with additional factor authentication as per the requirement.
Once the encrypted details are received by the e-commerce platform, the customer can then save the card for future transactions.

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Currently, most popular e-commerce platforms can only tokenize Mastercard and Visa provided cards. There is a possibility that cards of other financial services will be tokenized soon.
RBI’s new guideline has to be followed for both credit and debit cards.
The new guidelines do not apply to international transactions. Only domestic cards and transactions come under the new guidelines of RBI.
Customers will not have to pay any extra charge for card tokenization.
The e-commerce platform will display the last 4 digits of the tokenized card for easy identification of the customers as well as the issuing bank and the card network.
Lastly, tokenization of the card is necessary. Customers can choose to tokenize their cards or enter card details for quick transactions.