The Reserve Bank of India (RBI) on Wednesday included laptops, desktops, hand watches and Internet of Things (IoT) based products etc. The purpose of tokenization is to further strengthen the security of the payment system. Under this arrangement, instead of the actual card details, unique alternate code details are generated, which are called tokens. This card is a token matching the token requester and the identified devices.
Earlier, RBI had allowed token arrangement on the cardholder’s mobile phone and tablet. Under this, an alternate code is generated for the transaction. RBI said in a statement, “In view of the review of the system and the suggestions received from various stakeholders, the purview of the token arrangement will include consumer devices… laptops, desktops, hand watches, bands and Internet of Things (IoT) based products etc. It has been decided to incorporate this initiative. With this initiative, the transaction through the card will be more secure for the users.
It is noteworthy that RBI had issued guidelines on token system for card transactions in 2019. Under this, authorized card networks were allowed to provide token services on request. It is subject to certain conditions. Prior to this circular, this facility was available only for mobile phones and tablets.
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