The Reserve Bank of India (RBI) has issued a circular to all banks regarding the introduction of the Card-on-File (CoF) token facility at the bank level. This move aims to enhance convenience for cardholders by allowing them to create and link tokens to their existing accounts directly through various e-commerce applications.
Traditionally, the creation of CoF tokens was limited to merchant applications or webpages. With the recent circular issued by the RBI on Wednesday, the facility for CoF token creation is extended to the issuer bank level.
The RBI stated, "It has been decided to enable Card-on-File Tokenisation (CoFT) directly through card-issuing banks/institutions also. This will provide cardholders with an additional choice to tokenise their cards for multiple merchant sites through a single process."
The circular is addressed to "all payment system providers and payment system participants."
Card-on-File Tokenisation (CoFT) was introduced by the RBI in September 2021, with implementation commencing from October 1, 2022. Since then, over 56 crore tokens have been created, facilitating transactions with a total value of over Rs 5 lakh crore.
The implementation of tokenisation has been cited by the central bank as having a positive impact on transaction security and approval rates. This move reflects the ongoing efforts to enhance the security and efficiency of digital transactions in the Indian financial ecosystem.
(With Agency Inputs)
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