Over 560 million tokens issued in India: Visa
The Reserve Bank of India (RBI) had implemented the tokenisation facility for ecommerce transactions on October 1, 2022.
Over 560 million tokens have been issued in India since October last year, a study bysaid.
On October 1, 2022, the Reserve Bank of India (RBI) implemented the tokenisation facility for ecommerce transactions. It refers to the replacement of actual card details, including the 16-digit number, with a unique alternate card number, or ‘Token', for safer transactions. This way, the card details are encrypted and are not shared with anyone, including the merchants.
Of the 560 million tokens, 300 million were issued by Visa, the report titled ‘Enabling the Digital Shift: Tokenisation in India’s Economic Landscape’ highlighted.
“This is a substantial portion of its over 7.5 billion tokens issued globally, and leading to card authorisation rates rising by 4.5% since the introduction of tokenisation,” it added.
Elaborating on the growing importance of tokenisation technology, the report puts forth data on the increasing cyber attacks which surged sevenfold—from 0.2 million in 2018 to approximately 1.3 million in 2022.
Around 94% of industry executives surveyed noted there was a reduced risk of a data breach with tokenisation while 47% agreed that it led to improved payment experience, the report noted.
Meanwhile, 76% predicted a rise in contactless payments across devices and merchant categories.
On the overall journey, three-quarters of executives found the implementation process of tokenisation to be generally smooth, experiencing only minor issues in some instances.
The primary challenges organisations encountered while adopting tokenisation were complex integration, operational clarity of regulatory guidelines, and customer education and awareness.
“As the country pushes towards a digital economy with an increasing volume of transactions, tokenisation has immense potential to further digitise the payment ecosystem. With a substantial 560M tokens already in circulation and a fast-paced growth rate, we foresee tokenisation becoming a pivotal force in the evolution of digital payments,” said Vasudevan P, Executive Director, RBI.
Adding to this, Sandeep Ghosh, Group Country Manager for India and South Asia at Visa, said, “The RBI’s visionary policies and supportive regulatory framework have positioned India as a global leader in digital payments. This has catalysed the rapid growth of digital payments and the seamless implementation of innovations like tokenisation.”
“We are proud to have issued over 300M tokens in India and by embracing innovations such as biometric authentication, contactless payments, and integrated commerce solutions, we aim to enhance customer experiences, reduce fraud, and drive the expansion of digital payments,” he said.
Edited by Kanishk Singh