New Delhi: The Reserve Bank of India (RBI) has extended the deadline to comply with the card information storage rules by another six month as merchants and payments companies expressed their inability to meet the December 31 deadline.
In a statement, the RBI has said the timeline is being extended at the request of industry stakeholders.
The industry bodies earlier had requested the central bank to the extend the deadline from December 31 citing various challenges in implementing the new guideline under which the merchants will no longer be able to store customers’ card data in their servers.
Besides, most merchants, even banks were not prepared to switch to the new system on time. The payments industry had lobbied for two years at least for a smooth transition, according to reports.
The RBI in September prohibited merchants from storing customer card details on their servers and mandated the adoption of card-on-file (CoF) tokenisation as an alternative to card storage. The new rule was supposed to come into effect from January 1, 2022.
According to the RBI’s new directive on tokenisation, a customer has to enter his/her full card (debit/credit) card details each time to make payments during online payments.
Several banks have also informed their customers about the new RBI rule. Private lender HDFC Bank has been sending text messages to its customers that they will either have to enter full card details or opt for tokenisation.
A tokenised card transaction is considered safer as the original card details are not shared with merchants during e-transaction, according to the RBI. Token requester also cannot save any card details. The central bank has said that customer need not pay any charges for availing this service. So, it is a unique and new system for customers.