National Payments Corporation of India, also known as NPCI, launched NTS – NPCI Tokenisation Mechanism to support tokenisation of RuPay cards. It is meant to further enhance safety at customers’ end and ensure a smooth shopping experience. This new launch came after the RBI mandated card tokenisation from the start of the year 2022.
More about NPCI’s TROF
Token Reference on File (TROF) service linked to tokenisation is a way to ensure the security of the financial data of millions of RuPay card holders. Their card details will be kept safely at the RuPay Network Secure vault.
As per the set of guidelines mandated by the Reserve Bank of India, the security of payment transactions must be ensured with the help of an encrypted token. The generated tokens then allow safe payment processing without the need to disclose customer details or store customer data at the end of payment intermediaries. This will help prevent security and privacy breaches.
What is card tokenisation?
Tokenisation refers to the process that replaces the sensitive financial details of a card, including its CVV and card number, with an encrypted token. The token here is a set of unique characters that has all the essential information about the card without compromising its security against cyber frauds. It is generated either by the payments network or card issuer.
What does it mean for banks, merchants, and aggregators?
Aggregators, acquiring banks, and merchants, need to get themselves certified as token requestors with NPCI. They can then save the token reference number against all saved card numbers.
As per NPCI guidelines, they can also maintain the RuPay customer base with the help of TROF for future transactions made by their respective RuPay customers.
What has the Chief of Products, NPCI said about Tokenisation?
Kunal Kalawatia, Chief of Products, NPCI said:
“RBI’s guidelines on Card Tokenization are to enhance the safety of the digital payments ecosystem in the country. NPCI Tokenization System (NTS) for tokenization of RuPay cards will instill further trust in the millions of RuPay card holders to carry out their day-to-day transactions securely. This unique Card-on-File Tokenization solution will not only safeguard customers’ confidential data but will also further strengthen the overall digital payments environment.”
Tokenisation also implies faster checkout
In addition to enhancing the security of customer-sensitive information, tokenisation will also reduce friction that exists in the payment process. As a result, the end customers can have a faster checkout experience.