Fintech firm RazorPay on Friday announced a new tokenization solution for businesses that will provide their end customers the convenience of saved card transactions with added security and in compliance with RBI guidelines.
Razorpay TokenHQ will work on all major card networks including MasterCard, RuPay and Visa and will be ready to support almost the entire Aadhaar token card transactions of the 50 lakh businesses using RazorPay’s services, a statement said.
To further enhance the security of online transactions, RBI has issued a set of guidelines that prohibit businesses, payment aggregators and banks from storing credit/debit/prepaid card information of customers. The new guidelines only allow card networks and card issuers to store customer card information, and allow businesses to use the token to offer a saved card experience during online payments.
Card-on-file (COF) tokenization is the process of converting sensitive cardholder data into a string of randomly generated numbers called “tokens”, which have no meaningful value if violated. All stakeholders are required to ensure full compliance with the token framework by December 31, 2021.
“To help millions of Indian businesses comply with the new RBI guidelines, Razorpay has announced the launch of ‘Razorpay TokenHQ’…Razorpay TokenHQ is available to all businesses; and those using other payment gateways.” Merchants can also use Razorpay’s solution to tokenize cards and route payments using their existing payment partnerships,” Razorpay said in a statement.
The card tokenization framework ensures that customer card information is only with the customer, the card network and the issuing bank, significantly reducing the risk of card data leaks.
However, in the absence of tokens, customers will have to manually enter their card information every time they transact online. This creates friction for the customers and increases the chances of error in entering the data leading to failure of the transaction.
Tokenization, as a technology solution, bridges this inconvenience gap and enables customers and businesses to maintain business as usual by converting customer card information into a coded “token”.
“RBI is making great efforts to enhance the security and convenience of digital payments in India. The new regulations provide tremendous opportunities for us to grow and develop local solutions that work well for Indian businesses,” said Razorpay CTO and Co-Founder Shashank Kumar.
Tokenization is one such regulatory development, and RazorPay TokenHQ is an in-house solution that will enable businesses to continue to offer seamless payments while ensuring control over their card data, he said.
“There are over 950 million debit and credit cards in India and this number will only increase considering the increase in non-cash transactions in the hinterland of India. We expect to see a lot of growth in the coming times in creating smart, secure fintech solutions for businesses and their end users.”
Using Razorpay TokenHQ, businesses will be able to create, process, delete and modify tokens for online card payments with the consent of customers.
RazorPay TokenHQ enables the company’s existing customers (at standard and custom checkouts) to support card tokenization at zero cost and effort, the statement said. PTI S
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