Mastercard readies over 2 lakh merchants for RBIs' card on file tokenisation

Mastercard said that it has helped more than two lakh online merchants in India to deploy card on file tokenisation (CoFT) as mandated by the Reserve Bank of India (RBI). Mastercard added that it has helped service providers create 90 million tokens for its card users since December 2021.

As of June, around 195 million tokens have been generated across all platforms, according to RBI.

Mastercard said that it has been working with all major payment aggregators such as Juspay, PayU, Razorpay, BillDesk, and Paytm to enable merchants to switch to token-based transactions. The US-based company said that the number of merchants using tokenisation is expected to grow by September 30, the current deadline for implementing it.  

CoFT is a new mechanism that RBI wants merchants to use as an alternative to save actual credit and debit card credentials of users. It will replace sensitive card credentials such as card numbers, and expiry dates with a cryptographically generated random string called tokens.
Merchants will have to delete all saved card details and replace them with CoFT, which is deemed to be more secure as the actual card credentials remain hidden.

Though it was earlier expected to be enforced from this January, RBI postponed it for six months last December. The deadline was again extended last month for another three months.

Industry bodies including NASSCOM (National Association of Software and Service Companies) also urged the RBI to implement it in phases so all merchants could adopt it.

The extension of the deadline would also prevent disruption of services as was seen during the implementation of the additional factor of authentication (AFA) for recurring credit or debit card payments last September.

"Security, reliability, and convenience are the core tenets of a robust digital payment ecosystem. Tokenisation brings these tenets to life by ensuring the security of cardholder data without compromising the convenience and ease of online shopping," Nikhil Sahni, country corporate officer, India & Division President, South Asia at Mastercard, said in a statement.

Sahni further said that tokenisation also allows merchants to offer fast transactions with a ‘one-click’ checkout experience.