Bankers and business owners claim that even if some concerns about declined payments and revenue losses persist, the Indian central bank is unlikely to extend a deadline set for companies to add a second layer of security for client credit card information on Friday.
Three banking and merchant sources with knowledge of the matter who spoke to Reuters said that smaller merchants have requested a deferral of the compliance date, but the central bank has not indicated that one is likely to occur.
The Reserve Bank of India (RBI) did not respond to an email requesting a comment.
According to a banker at a sizable state-owned bank, “the general perception is that banks, card networks, and (bigger) merchants are better prepared, therefore the push from the ecosystem side Neither has there been a significant demand for an extension, nor have we seen anything to suggest one.
If it happens, it will be unexpected, he added.
Three years ago, India launched a significant move to protect card data by mandating businesses to tokenize cards by September 30.
It seems unlikely that the Reserve Bank of India (RBI) will extend this Friday’s deadline for firms to tokenize credit and debit cards. There has been no indication that the central bank will proclaim an extension past September 30 despite a request from smaller merchants, according to banking and merchant sources.
A banker at a state-owned institution claims that banks, card networks, and merchants are all more prepared than before. Because of this, there hasn’t been much of an ecosystem need for an extension, and we haven’t heard anything to suggest one either.
While major corporations and institutions are mostly prepared for tokenization, smaller merchants are concerned that they may encounter issues that may cost them customers. Merchant organizations got in touch with the central bank to ask for a delay in implementation.
A possible short-term drop in card-related transactions has some business owners and lenders concerned. The same thing happened when the prior deadline approached. Retailers reported that recurring payments have dropped by 10% to 15%. Another concern is what would happen if a product was returned because card information wouldn’t be stored on merchant systems. Since digital payments are expected to reach USD 10 trillion by 2026, analysts argue that tokenization is crucial.
The practice of substituting credit and debit card information with a unique code or token that permits payments without card information is known as tokenization. The guidelines were created by the RBI in 2019, and since then, there have been several public deadline extensions. Businesses in India must remove all stored credit and debit card data from their databases by October 1.
How to tokenize a card: When inputting your credit and debit card details at checkout on an e-commerce merchant website or application, you will have the option to tokenize your card by choosing the “secure your card” option. Use the OTP sent to your registered email address or mobile number to simply approve the tokenization.
Once finished, the card will be tokenized. The last four numbers of the saved card will be displayed when you open the website or app, allowing you to recognize your card.