GS 3: Economy | Mobilization of resources, Banking

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Reserve Bank of India has released guidelines on tokenization for various card transactions, including from debit and credit cards.

Tokenised card transactions services:

  • RBI has given permission to offer tokenised card transactions services to all channels such as near field communication (NFC), magnetic secure transmission (MST) based contactless transactions, in-app payments, QR code-based payments or token storage mechanisms, including cloud, secure element and trusted execution environment.
  • Tokenization and de-tokenization shall be performed only by the authorised card network and recovery of original Primary Account Number (PAN) should be feasible for the authorised card network only, the release said.
  • The request for tokenization and de-tokenization should be logged by the card network and available for retrieval.
  • A customer would not have to pay any charges for availing this service.
  • At present, tokenized card transaction facility would be offered through mobile phones or tablets only and will be extended to other devices later based on experience.

A note for Payment Networks:

  • Card networks shall get the card issuers/acquirers, their service providers and any other entity involved in payment transaction chain, certified in respect of changes done for processing tokenised card transactions by them.
  • Providing card tokenization services, authorised card payment networks shall put in place a mechanism for periodic system audit, at least annually, of all entities involved in providing card tokenisation services to customers.
  • The central bank also asked card issuers to ensure easy access to customers for reporting loss of ‘identified device’ or any other such event which may expose tokens to unauthorised usage. Registration of a card on token requestors app shall be done only with explicit customer consent through Additional Factor of Authentication (AFA), and not by way of a forced / default/automatic selection of check box, radio button.


  • Tokenisation, which aims at improving safety and security of the payment system, refers to replacement of actual card details with an unique alternate code called the ‘token’.
  • It shall be unique for a combination of card, token requestor and 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, quick response(QR) code payments.
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