Advantages of tokenization

The term ‘tokenisation’ has been making the headlines recently. The Reserve Bank of India (RBI) has allowed card networks and card-issuing companies to tokenise Debit Cards and Credit Cards. To tokenise a card means to substitute your bank card number with a unique series of characters that form a token. Without your card number being transmitted online, it is harder for hackers to track your card details.

How does tokenisation work?

Tokenisation replaces your Debit and Credit Card numbers with a unique code when making online payments. Ideally, when you pay using your card, the merchant saves your card details. You can see the card details saved in your shopping apps on your mobile device or tablet. By tokenising your card, a token gets transmitted online. The token is a random series of characters. Therefore, cybercriminals cannot track it back to your card or bank details.

Advantages of Tokenisation

The RBI has kept the tokenisation service optional for cardholders. However, businesses that accept debit cards and credit card payments can no longer store card details.

Benefits of tokenisation for customers

  • Free of cost: You can tokenise any number of cards without any charges. The facility is free of charge, and you can avail it easily.

  • Improved security: Having your card details replaced by a random token lowers the risk of a online fraud on your card. Even if there were a data breach at the merchant’s end, your actual card details are not shared/stored with merchants , thereby ensuring maximum safety.

  • Faster check-outs: Tokenising your cards saves you the hassle of manually entering your card details every time you shop. By tokenising your card, you can enjoy a speedy check-out process.

  • Easy management: Customers can choose to suspend their tokens if the card is no longer in use. If your cards expire, upon receiving the new cards, you can simply get them tokenised again.

Benefits of tokenisation for businesses

  • Prevents frauds: Frauds constitute a significant threat to a business’s reputation. Through tokenisation, cybercrimes can be minimised, and the business can avoid fraud. Even if a criminal gets hold of some tokens, there is no data associated to steal.

  • Build trust with customers: Customers can rest assured that their confidential information is not circling on the web. Tokenisation secures online transactions and fosters trust and reputation between businesses and their customers.

  • Allows for more frequent payments: Since more people are embracing online shopping, they want a fast check-out process. Businesses can leverage tokenisation to get recurring payments from their customers.

Bottom Line

When making any online transaction, one cannot ignore the possibility of a data breach. Tokenisation takes your existing card security to the next level by replacing your card details. Both customers and businesses are able to benefit from tokenisation. Tokenising your cards is easy. When you shop online through your phone or tablet, choose the ‘save your card’ or similar option that pops up on the screen. Enter your CVV and OTP received on the registered mobile number. Your card details are secure and safe with the Bank.

To apply for a Credit Card, click here. Pre – approved Credit Card holders, can click here.

Read more on how to make contactless payments a part of your life through Credit Cards, here.

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Credit Card approvals at the sole discretion of HDFC Bank Limited. Credit Card approvals is subject to documentation and verification as per Bank's requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.