Merchants, companies can’t store date from January 1: Reserve Bank of India

The Reserve Bank of India has directed that no entity or merchant other than card issuers and card networks can only store the details of the card from January 1, 2022. Tokenisation of Card-on-File by card issuers has been extended. RBI had already barred storage of data in March 2020 but extended the deadline to December 31, 2021. RBI has permitted card issuers to offer card tokenisation servicers as token service providers. The facility of tokenisation will be offered by the token service providers only for the cards issued by or affiliated to them.
What is Tokenisation?
Tokenisation refers to replacement of actual card details with an alternate code called the token, which will be a unique for token requestors and device. It helps to reduce the frauds that occur by sharing card details like card number and CVV.
Card- on- File (CoF) is a transaction where a cardholder has authorised a merchant to store the cardholder’s MasterCard or Visa payment details. The cardholder then authorises same merchant to bill the cardholder’s stored MasterCard or visa account.

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