Razorpay, a fintech company, introduced a tokenization solution that will ensure saving credit card transactions with added security within the guidelines of RBI.
Tokenization is a process of substituting sensitive cardholder information into a string of characters known as a token that does not have any exploitable meaning. Unlike encryption, where data can be decoded to reveal sensitive information, tokens are references to the original data which cannot be interpreted.
The ‘Razorpay TokenHQ’ will partner with all major card networks – Mastercard, RuPay and Visa to provide tokenized services to the entire base of five million businesses using Razorpay’s services.
Earlier, RBI had issued guidelines that forbade payment aggregators, banks and businesses from storing customers’ card information.
The new guidelines permit only card networks and issuers to store customers’ credit and debit card information. It allows the use of the token to those businesses offering saved card information during online payments.
All businesses can use TokenHQ. The merchants using other payment gateways can also use Razorpay’s tokenization solution and direct payments through their existing payment partners.
The card tokenization framework ensures that the data remains only with the customer, the bank and the card network, reducing the risk of credit card leak.
In the absence of tokenization, the customers will have to enter the card details manually whenever they transact online, leading to friction and failure of transactions due to an increased number of errors.
Tokenization reduces the inconvenience gap and enables customers and businesses to have safe online transactions by converting the sensitive card data into a coded form called a ‘token’.
The RBI is taking all the measures to improve the security and ease of using digital payments in India. The latest regulations have colossal opportunities to innovate and create localized solutions for Indian businesses.
Razorpay’s TokenHQ is a native solution that will help businesses to provide smooth and uninterrupted payment services, and would also ensure safety by allowing the customers to have control over their card data.
India has 950 million debit and credit cards, and this number will keep growing, considering the increasing number of digital payments. There is a scope for building safe and secured fintech solutions for businesses and end-users.
With the help of TokenHQ, businesses will be able to develop, process, modify and delete tokens for online payments with customers’ consent.
Razorpay TokenHQ allows customers to use tokenized card solutions at zero cost and effort.
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