Explained: Big changes from July 1 for your credit card, banks not ready

Have you had trouble with your OTT payments, or have platforms where your card details were stored suddenly stopped processing your payments? Well this is all in prep for the big change that is to kick in from July 1 but wait banks are now saying they are not fully ready.

What is tokenisation?

Tokenisation refers to the process of replacing credit/debit card details with a unique alternate code, ‘token’. Card networks such as Visa, RuPay and MasterCard will issue tokens to token requestors. Under this process, merchants will have to delete any credit and debit card data stored on their platforms and replace them with a token.

Also read/watch| Deloitte’s Gen Z and Millennial Survey: Check out their top concern

So what changes?
Customers who don’t tokenise their cards will have to enter card details every time they make a purchase of any item or subscription on online platforms.

Businesses/Customers worried
This is a bit particularly subscription-based platforms where users may drop off long held subscriptions due to the problems in getting 'tokenised' Also if a consumer forgets to tokenise an instalment, he/she may miss out on making the payment on time and will have to face its consequences.

Another extension?
As per reports, saying that the time given for implementation of the rules was too short, the Indian Banks’ Association (IBA) has submitted an extension request to the central bank.

Countdown to deadline
RBI introduced card tokenisation guidelines in 2020 but following requests from various stakeholders, the central bank extended the deadline twice, and the new rules are set to come into effect from July 1, 2022.