Visa Launched Cardless, Token-Based Payment For MakeMyTrip, Grofers; Cards Not Needed Now?
CoF Launch In India
The card-on-file tokenization service has been launched in partnership with Juspay, According to a press release issued by Visa on October 6, 2021.
It is India’s first CoF tokenization service, which is now available across eCommerce platforms such as Grofers, BigBasket and MakeMyTrip.
“This will be critical in building consumer trust on merchant platforms and reassure them of the safety of their payment credentials on these platforms. We have enabled all our banking partners for tokenization and continue to work closely with merchants, payment aggregators and gateways to ready the ecosystem for CoF tokenization rollout,” said TR Ramachandran, the Group Country Manager, India and South Asia, Visa.
Basically, tokenization is the process of replacing the 16-digit payment card account number with a unique digital identifier known as a ‘token’ for mobile and online transactions.
This helps in allowing payments processing without giving away the cardholder’s account details.
“Tokenization refers to the replacement of actual card details with an alternate code called the “token”, which shall be unique for a combination of card, token requestor (i.e. the entity which accepts a request from the customer for tokenization of a card and passes it on to the card network to issue a corresponding token) and device (referred hereafter as “identified device”),” as per the RBI‘s FAQs.
What Are The Benefits Of Tokenization?
According to the central bank FAQs, a tokenized card transaction is considered safer compared to sharing the actual card details as the details are not shared with the merchant during transaction processing.
Prior to this, during August, the RBI’s CoF tokenization guidelines were issued.
This has mandated replacing the actual card data with encrypted digital tokens, which are then used to facilitate and authenticate transactions.
The Visa release stated, “This devaluation of sensitive card details alleviates risk and reduces the vulnerability of sensitive data, as only tokens are present in transit, across the ‘in-rest’ and ‘in-use’ phases. These new guidelines are expected to enhance consumer trust in e-commerce payments, ensure seamless experience as well allow card issuers the comfort of authorizing a higher number of transactions,”.