![]() Think of these as individual buckets full of money representing each aspect of your company. Under this system, your entire business is organized into individual accounts. ![]() Most businesses these days use the double-entry method for their accounting. The efforts of Reserve Bank to deepen digital payments in India and make such payments safe and efficient shall continue," RBI release noted.In a nutshell: debits (dr) record all of the money flowing into an account, while credits (cr) record all of the money flowing out of an account. "Contrary to some concerns expressed In certain sections of the media, there would be no requirement to input card details for every transaction under the tokenisation arrangement. The central bank had said that there will be no requirement to input card details for every transaction under the tokenisation arrangement No need to memorize 16-digit debit, credit card numbers The initiative is expected to make card transactions more safe, secure and convenient for the users Stolen card data can also be used to perpetrate frauds within India through social engineering techniques," RBI had said in its release. ![]() Any leakage of CoF data can have serious repercussions because many jurisdictions do not require an AFA for card transactions. In the recent past, there were incidents where card data stored by some merchants have been compromised/leaked. Availability of such details with a large number of merchants substantially increases the risk of card data being stolen. "In fact, some merchants force their customers to store card details. To, put it simply, your risk gets reduced when you share the details of your debit/credit card in the form of a token. ![]() When the card details are saved in an encrypted manner, the risk of fraud or compromised data gets reduced. You approve transactions with CVV and OTP.The merchant saves the token for subsequent transactions.For making payment to a different merchant or from a different card, tokenisation is to be done again.The card network creates a token as a proxy to the card number and sends it back to the merchant.Once, you give consent, it sends a tokenisation request to the card network.The merchant initiates tokenisation by asking for your consent to tokenise the card.What cardholders need to do from next month Once done, you will complete the payment by keying in your card’s CVV and OTP. This token is unique for each combination of card, token requestor and device.įrom January onwards, when you make the first payment to any merchant, you will need to give him/her your consent with an additional factor of authentication (AFA). Tokenisation refers to replacement of actual card details with a unique alternate code called the “token". In fact, a transaction is successful only if all of these variables are entered correctly for a specific transaction. When you use your card, debit or credit, for a transaction, the execution of the transaction is based on information like the 16-digit card number, the card expiry date, the CVV as well as the one-time password or transaction PIN. The RBI had ordered all companies in India to purge saved credit and debit card data from their systems from January 1, 2022. It issued fresh guidelines in September 2021 giving companies until the end of the year to comply with the regulations and offering them the option to tokenise. RBI issued guidelines in March 2020 saying that merchants will not be allowed to save card information on their websites to boost data security.
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