New Credit, Debit Card rules to come into effect starting January 1: Here's what you need to know!

Mobile apps, merchants, and payment gateways are not permitted to save debit/credit card details. Users need to enter details or use tokenisation

In an effort to make online records of credit and debit cards inaccessible to hackers and to make online payment transactions secure, India's central bank, the Reserve Bank of India (RBI), has decided to implement new rules and regulations that come into effect on January 1, 2022.

According to the RBI directive merchants and payment gateways are not permitted to save debit/credit card details of customers in their systems. This means that all saved data in mobile apps, e-commerce sites, digital wallets, and payment gateways will be erased by December 31, 2021. Customers and card holders will now either need to enter their debit or credit card details every time they make an online transaction or the merchant can use the tokenisation option.

What are the new debit/credit card rules?

Amidst increasing instances of debit and credit card details being stolen from merchant databases, the RBI announced a new regulation prohibiting businesses and payment gateways from saving credit or debit card numbers in March 2020. Most banks were not ready to implement the rule within a short time and the deadline for implementation was extended to the end of the current calendar year. The RBI said, "With effect from January 1, 2022, no entity in the card transaction/payment chain, other than card issuers and/or card networks, shall store actual card data. Any such data stored previously shall be purged".

What does it mean for the card user?

If you are an IDFC FIRST Bank credit card user, you may have saved your card details on various applications or platforms such as Uber, Zomato, Netflix, Amazon etc. Now every time you make a transaction on these apps or sites you need not enter the 16-digit card number or expiry date. You are prompted to enter the CVV and the OTP that is sent to your phone number/email thereby enabling you to complete the transaction. This will no longer be possible. You may need to enter all your details each time you use these applications or gateways or may opt for tokenisation.

What is tokenisation?

A token is a unique alternative code that a merchant will be provided by the bank for a specific card. So, if you regularly use an app or an e-commerce site, the merchant may request your consent to tokenise the debit/credit card that you use. This will then be sent to the card network by the merchant for tokenisation.

The card network will now create a token as a proxy and send it back to the merchant. The merchant can save this token instead of the card number and you can authorise payments as usual using your CVV and OTP.

Every merchant you transact with will need to apply for a token and will be given a different token. Every card you use will also receive a different token. So, if you use a credit card across different platforms, one merchant will receive a different token than another merchant. This greatly enhances the security of your debit/credit card.

To know more about the new usage guidelines on your IDFC FIRST Bank debit/credit card, do reach out to our customer service team or visit your nearest branch.

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.