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What Is Card Tokenization- The New Way Of Online Shopping Without Debit/Credit Cards

Online shopping from 2022 will require no debit and credit card as customers can do it through card tokenization. Know full details here

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Pooja Suryavanshi
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A lot of changes are on their way and will affect our lifestyle from 1st January. This includes the biggest change that is our online shopping experience at Amazon, Flipkart, Myntra, and more. RBI has rolled out new debit and credit card rules that allow card tokenization for payments including online shopping.

Mastercard, Google, HDFC bank are the first few who have announced that customers now need not share their card details while shopping.  This is going to be a new normal from 2022 so customers should have a better understanding of future payments.

What Is Card Tokenization?

card tokenization
Tokenization is one of the methods used by organizations to protect the sensitive data of their users, just like encryption. However, the two are different in a few ways. Tokens are the data or values that are not sensitive or have no relation with the original data being tokenized.

For example- a poker chip can be a good example of a token that is equivalent to a representative cash value. But one cannot steal the cash amount by stealing a chip because the two have no direct relation. Tokens are exactly the same thus they are safe and secure.

It is an irreversible process which means the real data cannot be retained. This also adds an additional security as in case the tokenized environment gets affected, data won’t get compromised. But the original data can be retrieved if the organization stores it somewhere in their internal systems.

After RBI proposed new debit, credit card rules, no organization can store the customers’ data. On the other hand, customers need not remember the complete debit or credit card number. A CVV and expiry date will be required for tokenization which is also a one-time process.

Also Read: RBI’s New Policy Allow Cash Withdrawal Without ATM Cards

Will I Have To Pay For Card Tokenization?

card tokenization
e-commerce platform will provide a different token for the same card. For example- If you are using an SBI card for online shopping on Amazon then the token will have a different value than it has on Flipkart. In other words, tokens are platform-independent which makes them even more secure.
  • Users will also have the flexibility to tokenize different cards for a dedicated merchant and vice versa.
  • Customers can even remove the tokens as per their preferences and manage them on the issuers’ portal.
  • In case, the user gets a new card then a fresh token has to be generated for the transaction.

    • The new debit and credit card rules make online shopping and transaction more secure. Hackers cannot breach the card network or token environment to extract customers’ sensitive data.

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