NASSCOM-Industry consultation on Card on File Tokenisation

Terms of use

Terms of Use

The use of this site and the content contained therein is governed by the Terms of Use. When you use this site you acknowledge that you have read the Terms of Use and that you accept and will be bound by the terms hereof and such terms as may be modified from time to time.

All text, graphics, audio, design and other works on the site are the copyrighted works of nasscom unless otherwise indicated. All rights reserved.
Content on the site is for personal use only and may be downloaded provided the material is kept intact and there is no violation of the copyrights, trademarks, and other proprietary rights. Any alteration of the material or use of the material contained in the site for any other purpose is a violation of the copyright of nasscom and / or its affiliates or associates or of its third-party information providers. This material cannot be copied, reproduced, republished, uploaded, posted, transmitted or distributed in any way for non-personal use without obtaining the prior permission from nasscom.
The nasscom Members login is for the reference of only registered nasscom Member Companies.
nasscom reserves the right to modify the terms of use of any service without any liability. nasscom reserves the right to take all measures necessary to prevent access to any service or termination of service if the terms of use are not complied with or are contravened or there is any violation of copyright, trademark or other proprietary right.
From time to time nasscom may supplement these terms of use with additional terms pertaining to specific content (additional terms). Such additional terms are hereby incorporated by reference into these Terms of Use.

Disclaimer

The Company information provided on the nasscom web site is as per data collected by companies. nasscom is not liable on the authenticity of such data.
nasscom has exercised due diligence in checking the correctness and authenticity of the information contained in the site, but nasscom or any of its affiliates or associates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this site. The information from or through this site is provided "as is" and all warranties express or implied of any kind, regarding any matter pertaining to any service or channel, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement are disclaimed. nasscom and its affiliates and associates shall not be liable, at any time, for any failure of performance, error, omission, interruption, deletion, defect, delay in operation or transmission, computer virus, communications line failure, theft or destruction or unauthorised access to, alteration of, or use of information contained on the site. No representations, warranties or guarantees whatsoever are made as to the accuracy, adequacy, reliability, completeness, suitability or applicability of the information to a particular situation.
nasscom or its affiliates or associates or its employees do not provide any judgments or warranty in respect of the authenticity or correctness of the content of other services or sites to which links are provided. A link to another service or site is not an endorsement of any products or services on such site or the site.
The content provided is for information purposes alone and does not substitute for specific advice whether investment, legal, taxation or otherwise. nasscom disclaims all liability for damages caused by use of content on the site.
All responsibility and liability for any damages caused by downloading of any data is disclaimed.
nasscom reserves the right to modify, suspend / cancel, or discontinue any or all sections, or service at any time without notice.

For any grievances under the Information Technology Act 2000, please get in touch with Grievance Officer, Mr. Anirban Mandal at data-query@nasscom.in.

New

See all

No notification found.

NASSCOM-Industry consultation on Card on File Tokenisation

Apurva Singh

@apurvaa

December 9, 2021

Public Policy

329

The Guidelines for Payment Aggregators and Payment Gateways (PA/PG) prohibit merchants and payments aggregators from storing card details after December 31. To this effect, on September 07, the RBI allowed Card-on-File tokenisation (CoFT) for merchants and PAs allowing them to store last 4 digits of card number to ensure seamless transactions and user experience.

On December 07, 2021, NASSCOM organised a closed-door consultation with its members- card networks, payment aggregators, and merchants - to identify the challenges in adhering to the card deletion deadline of December 31, and compliance with Card-on-File tokenisation framework. In the consultation, the industry highlighted the disruption caused by e-mandate on recurring transactions which has particularly impacted customer experience, small and medium enterprises (SMEs), and SaaS companies.

State of preparedness for Card on File Tokenisation

While the industry welcomed tokenisation, they raised concerns with the extant framework including infeasibility of purging card data timeline, consent, and guest check-out. The industry highlighted the absence of transparency around the coverage of issuer banks which networks have, and the readiness of RBI’s regulated entities (REs). It was highlighted that there is uncertainty with regards to the readiness of issuer and acquiring banks vis-à-vis token provisioning, processing and deployment of solutions for various use cases.

To ensure a smooth and seamless rollout of CoFT, the following were discussed in the consultation:

Extension of timeline: The payment ecosystem is an interdependent ecosystem wherein stakeholders are heavily reliant on each other to ensure seamless digital transactions for customers. Merchants rely on readiness of REs who offer tokenisation services. However, in the absence of viable solutions, merchants will be left in lurch wherein after December 31^st, 2021. They would not be allowed to store card data and will not have access to tokenised data either. Three-months is too short a time for the players in the ecosystem to be ready with tested systems.

To this effect, it was proposed that a viable solution for merchants would be to where at-least banks issuing 80% cards have integrated and tested the CoFT solution with the networks, and stable APIs are available for the merchants to test and integrate themselves with the CoFT solutions.

For smooth transition and integration of systems, and to ensure that consumer experience is not impacted, it was suggested that tiered implementation of timeline i.e. requiring REs to develop, test and integrate their solutions, and subsequently merchants onboarding into the solutions should be the way forward. This shall ensure that customers are able to transact in a safe friction-less manner, and the disruption is minimal for all the stakeholders.

It was also suggested that to achieve the above-mentioned, and minimally disrupt the ecosystem, the RBI may grant an extension to merchants and PA for purging stored card details.

Compliance by REs to be monitored by the RBI: As of now, there is not clarity if issuer and acquirer banks have integrated their solutions with card networks. RBI monitored compliance shall ensure that the REs adhere to the timeline.

It was also suggested that RBI regularly publish this information on its website to serve as a single and credible source of information for the ecosystem.

Consent: The RBI circular requires explicit consent of the cardholder to tokenise its card data. Considering that the current timeline is insufficient to get consent from all users, a clarification on taking consent ahead of actual provisioning may help merchants and PAs to integrate faster once the solution is ready, tested and integrated.

In addition to this, the RBI could consider allowing bulk tokenisation of data of existing customers who have already consented to store card data with merchants. Their consent could be understood to include consent to tokenise card. It is a step towards enhancing consumer protection considering that such consent shall be in line with the original purpose of consent. The RBI may consider providing customers with an option to opt-out in case they do not consent to tokenisation.

Allowing BIN Range storage by merchants and PAs: The RBI circular dated September 07, 2021, allows storing limited data – last four digits of actual card number and card issuer’s name – for transaction tracking and reconciliation purposes. However, merchants require BIN range to ascertain card type, issuer, network etc. for purposes such as offers, EMIs, refunds, cybersecurity risks and identifying fraud patterns. Since the circular already allows storing card issuer’s name and last four digits of card, the RBI may consider allowing merchants and PAs to store bin ranges.

Considering that BIN range is publicly available information and cannot uniquely identify a card, storing of BIN range does not infringe privacy of a customer.

Guest checkouts: With merchants not allowed to store card data, customers who transact as “guests” without signing up on a platform, may face challenges in case of refunds. In such cases, merchants shall not be able to ascertain payment instrument against which a refund has to be processed. It was suggested that either RBI may allow card acquirers to store card data for life cycle of a transaction or merchants may be allowed to store card data of such customers till the validity of refund period as offered by merchants.

Based on the feedback received, NASSCOM is finalising a submission to the RBI requesting it to extend the timeline to purge card details for merchants and payment aggregators, implement a tiered timeline, allow BIN range storage amongst others.

Card on File Tokenisation RBI

Disclaimer

That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.

Apurva Singh

Senior Policy Associate

Write to me for all things related to FinTech, Drones, Data and Gaming