What is tokenisation?

The information you provide to banks, financial institutions, and digital platforms—including apps and websites—is safeguarded by strong security measures. The Reserve Bank of India (RBI) has taken significant steps to enhance this protection. On January 8, 2019, the RBI issued a notification permitting card-issuing companies to implement tokenisation and de-tokenisation services to reduce the risk of fraud. Tokenisation effectively secures your card details during online merchant payments. Read on to learn more about tokenisation and its functionality.

Tokenisation is a security measure wherein your existing card details are replaced with a unique code called a token. Tokenisation is used on e-commerce platforms, food delivery apps, and across the digital payment spectrum, where you must enter your card details. These platforms hold sensitive data like your Debit Card and Credit Card numbers, expiry dates, etc. Tokenisation ensures that your card details are protected and safely stored with the bank or network (Visa/MasterCard/Diners Club/Rupay)

With tokenisation, you can continue your online transactions as usual, but now, the merchant cannot access your actual card details. Here’s a quick overview of how tokenisation facilitates secure payments:

• When you use card tokenisation, your card-issuing company generates a unique token for your card, which the merchant securely stores.
• When you make a transaction, the merchant sends this saved token to your card issuer.
• Your card issuer verifies if the card number associated with the token has sufficient funds.
• If there’s enough balance, your card issuer approves the transaction, allowing the merchant to receive the payment.

The RBI issued a notification that from October 1, 2022, merchants can no longer store customers’ card details. Merchants can only store the last four digits of the card and the customer’s name. Here are some RBI guidelines regarding tokenisation that you ought to know.

• Tokenisation is a voluntary service that requires your explicit consent via an Additional Factor of Authentication (AFA). Without tokenisation, merchants cannot store your card details, meaning you must enter them each time you shop.
• You can tokenise multiple cards within a single application and set limits for individual transactions and daily spending.
• Your card issuer may decline a tokenisation request if they detect potential risks.
• You also have the option to suspend a token for a specific merchant or all merchants by contacting your card-issuing company. In this case, the issuer will remove the linked tokens, and you'll need to enter your card details for future transactions manually.

You can read more about the RBI guidelines on tokenisation here.

Card tokenisation is a one-time process offered by HDFC Bank. Here’s how it works.

• You enter your HDFC Bank Credit or Debit Card details during checkout when purchasing groceries through a mobile app.
• You’ll receive a notification to 'Secure Your Card' or 'Verify Card', which you must confirm to consent to tokenisation.
• Next, the app will prompt you to enter your CVV, and an OTP will be sent to your registered mobile number.
• Once you input the OTP, your card will be saved and tokenised.

Post tokenisation, in the ‘Saved Cards’ section of the mobile app, you can only view the last four digits of your HDFC Bank Cards.

Apply now here for HDFC Bank Credit Cards and benefit from state-of-the-art digital security and great offers on purchases that you make online! Pre-approved Credit Card holders can get their cards by applying 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. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.

*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.