What is card tokenisation?

Summary: Card tokenisation is the reason why credit card transactions are now safer than ever, businesses are finding it easier to comply with PCI DSS, and card payments don’t mean the sharing of sensitive card information anymore.

23 Apr 2024 by Team FinFIRST

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If you often shop online, such as Amazon and Flipkart, you must have noticed that your credit card information would appear pre-filled on the payment page. While it makes for swift and convenient credit card transactions, this information stored on a third-party platform was also a cause of concern for many. The Reserve Bank of India helped assuage them by introducing the credit card tokenisation process.

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What is credit card tokenisation?

With tokenisation, the original card details get replaced with an alternate code. This code, known as a token, is a combination of the card details, the device used, and the requestor who receives the tokenisation request and forwards it to the card network.

A customer can choose the tokenisation of credit cards at no additional cost and neither is it compulsory. However, there are plenty of reasons why a customer should choose card tokenisation.

Why tokenise your credit card transaction?

Here are some of the reasons why tokenisation is beneficial for the typical credit card customer:

Freedom from data theft – With tokenisation, your credit card details are completely altered into a unique code. Even if someone gets hold of the code, it is useless for anyone other than the owner of the credit card. Meanwhile, the credit card details are safe and undisclosed.
Same but different – With card tokenisation, the customer enjoys the same payment experience. The token is saved for repeat purchases, which makes shopping quick and simple. Thus, tokenisation doesn’t mean that you will have to punch in your credit card details every time you shop.
Universal use – Tokenisation can be used for credit card transactions made against online purchases, in-store payments, and in-app and mobile purchases. It can be opted for while making payments through all types of devices including wearables and IoT devices.

A business-friendly introduction

It is not just the credit card customer; businesses stand to benefit a lot from tokenisation. Here are some of these benefits -

Risk reduction – A token is unique to a card and merchant. This makes tokenised transactions less prone to data thefts. For businesses, the risk associated with the storage of customer data is greatly reduced.
Flexibility – Due to the multi-channel usability of tokenisation, payment acceptance and processing is flexible and safe for businesses.
Reduced maintenance – With the storage of sensitive data eliminated, the data handling costs and efforts of businesses have decreased.
Business compliance – Card tokenisation has made it easier for businesses to comply with the Payment Card Industry Data Security Standard (PCI DSS) compliances. This has elevated the trustworthiness of businesses, particularly in the eyes of security-conscious consumers.

Your credit card and tokens

IDFC FIRST Bank Credit Cards come with the tokenization feature to provide added security of online payments. Being PCI DSS compliant, IDFC FIRST Bank Credit Cards can be used for tokenised payments in a few simple clicks. Once you choose this option, a token against your IDFC FIRST Bank Credit Card is instantly created after the OTP verification.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirst.bank.in for latest updates.