Home / Companies / News /  Visa launches India’s first card-on-file tokenization service
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Digital payments firm, Visa, has launched India’s card-on-file (CoF) tokenization services in India, in line with the recently issued Reserve Bank of India (RBI) guidelines.

Launched in partnership with mobile-based payments firm, Juspay, the CoF tokenization service will be available across e-commerce companies such as Grofers, Bigbasket and MakeMyTrip.

The Reserve Bank had recently issued a final circular making card tokenization mandatory from 1 January 2022.

Card tokenization is a process of substituting sensitive customer data (such as card number, CVV, etc.) with an algorithmically generated token (encrypted) by a token service provider, which could be the card issuer or payment networks.

These tokens flow through the payment systems in a secured way without disclosing the customer details or allowing the payment intermediaries (merchants, payment aggregators) to store customer data.

Card-on-file (CoF) tokenization provides two key benefits—consumer and ecosystem security and an enhanced checkout experience.

As per Visa, the devaluation of sensitive card details alleviates risk and reduces vulnerability of sensitive data, as only tokens are present in transit, across the ‘in-rest’ and ‘in-use’ phases.

It further added that RBI’s new guidelines are expected to enhance consumer trust in e-commerce payments, ensure seamless transaction experience as well allow card issuers the comfort of authorizing a higher number of transactions.

Commenting on the launch, T.R. Ramachandran, group country manager, India and South Asia, Visa, said: “The RBI’s move to allow CoF tokenization for ecommerce payments will revolutionize digital payments across India’s ecommerce platforms. Having launched CoF tokenization services in over 130 countries globally, we are confident of the technology’s ability to build a safe, secure and seamless environment for digital payments."

Emkay Global Financial Services in a recent report had said that the card tokenization will be a near-term irritant but long-term positive and will alleviate security concerns for online transactions.

The RBI guidelines have come at a time when Indian consumers continue to adopt digital payment methods for daily and discretionary needs.

As per industry reports, the digital payment/lending space is likely to expand manifold. Digital payments is likely to reach $95 trillion by FY25E from $30 trillion and gross merchandise value of ‘buy-now-pay-later’  may reach $45 billion-$50 billion from $3 billion-&3.5 billion.

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