During festive seasons like Durga Pujo and Diwali in India, shopping offline gets crazy. That’s why e-commerce giants are making our life easier when it comes to shopping.
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Now with RBI’s guidelines for making tokenization mandatory by 30th September, you may be wondering what will happen. Don’t worry our favorite online e-commerce stores like Amazon, are ready with tokenization.
You can carry on with seamless transactions while being sure your data is safe.
What exactly is tokenization and why should you care?
Tokenization is as simple as buying a token for your metro rail daily ride. You give money to buy x number of rides from point A to B. All the data is encrypted in the token you get from the metro.
In the digital world, it’s like your online payment data gets transferred or encrypted to a string of random numbers that do not correlate with your actual payment data.
Does Tokenization prevent Data theft?
Most e-commerce platforms pay huge sums to keep their customer data safe. But digital theft is a reality. With tokenization, if the data is compromised somehow, despite best efforts, the stolen data is useless.Even if someone manages to steal data from your digital wallet or e-commerce store account, the data will be a string of random numbers or the token which keeps your money safe. The tokens when they pass through various systems to process the payment act as the agent for your payment details like card number, and expiry date without the payment details being visible. Just like OTP, tokenization is a good initiative to have another additional layer of safety for payment data
Nowadays going digital is not a choice, it’s a mandatory payment option even for retail stores.
When you have e-commerce giants ready with tokenization you can now shop for your loved ones without worry. The best part is that each e-commerce store will generate a different token for the same card information.
What happens if there’s a data breach?
If any data breach occurs, the tokens are automatically canceled without your card data being revealed. That way you don’t have to get a replacement card for a data breach at the retailer’s end.
RBI now makes the banks issuing the cards responsible for keeping card information safe through the tokenization mandate that comes into effect from Oct 1, 2022.
When you pick the ‘pay with a card’ option for any e-commerce platform or wallet, it prompted you to pick a bank. It’s at that time when the card information is inserted, a token is generated which is then used by the merchant to process payment. In this way, the e-commerce site or digital wallet never has your sensitive data stored in their system.
E-commerce platforms like Amazon are ready in time to help you shop safer with tokenization in place. They have embraced tokenization fully, with a majority of their customers tokenized. Tokenization in the industry is good for the transaction ecosystem and the customers as it adds security and safety to every transaction they make online. However, the fact remains that smaller merchants are still not ready completely in terms of infrastructure. More time for readiness across the industry is needed so that there are no disruptions.
This is a sponsored post. Kindly read my full disclosure here.
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