One97 Communication Limited, a digital financial services company based in the Paytm division, has tokenized 28 million cards across Visa, Mastercard, and RuPay, and said on Thursday that it intends to purge saved card data by June 30. The tokenised cards account for 80 percent of monthly active cards on the Paytm app, according to the company.
"Paytm is committed to ensuring safe and secure online payments, and the RBI''s tokenization process is a key milestone for the industry. We recognized the need for tokenized cards and implemented the same on the Paytm app," founder and CEO Vijay Shekhar Sharma said.
Tokenisation, which aims to improve the security and security of the payment system, refers to the replacement of actual card details with a unique alternate code called the ''token,'' which will be unique for a card, token requestor, and an identified device.
Instead of using actual card details, this token is used to perform card transactions in contactless mode at point of sale (POS) terminals and quick response(QR) code payments.
The RBI has been permitted to offer tokenised card transaction services to all channels, including: near field communication (NFC), magnetic secure transmission (MST) based contactless transactions, in-app payments, QR code-based payments or token storage mechanisms, including a cloud, secure element and a trusted execution environment.
At present, tokenised card transaction facilities would be available on mobile phones or tablets only, extending them to other devices later based on experience.
Before providing card tokenisation services, the RBI has stated that authorized card payment networks shall establish a mechanism for periodic system audits, at least annually, of all entities involved in providing card tokenisation services.
The central bank has urged card issuers to provide easy access to customers for reporting a loss of a ''identified device'' or any other such event, which might expose tokens to unauthorised usage.
The RBI has set a deadline for companies to complete tokenisation on June 30.
"The company has tokenised 28 million cards across Visa, Mastercard, and RuPay in its effort to make online card transactions more secure for consumers. Paytm will be able to purge saved card data ahead of the RBI deadline," Paytm said.