RBI extends scope of tokenization to consumer devices

The Reserve Bank on Wednesday extended the scope of ‘tokenization’ to a several consumer devices, including laptops, desktops, wearables like wristwatches and bands, as well as Internet of Things (IoT) devices. Tokenization, which targets working on the improving and security of the payment system, refers to the replacement of actual card details with a unique alternate code called the ‘token’, which is unique for a combination of card, token requestor and identified device.

The RBI had earlier permitted ‘tokenization’ services, under which a unique alternate code is generated for transaction purposes, on cell phones and tablets of cardholders.

“On a review of the framework and keeping in view stakeholder feedback, it has been chosen to extend the scope of tokenization to include consumer devices – laptops, desktops, wearables (wristwatches, bands, and so on), Internet of Things (IoT) devices, and so forth,” the RBI said in a round.

The initiative is relied upon to make card transaction more safe, secure and convenient for the clients, it added.

In January, 2019 the RBI had issued guidelines on “Tokenization – Card transaction”, permitting authorized card network to offer card tokenization services to any token requestor, subject to conditions.