What is Card-on-File Tokenisation?

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About Card-on-File Tokenisation

Tokenisation refers to replacement of actual credit and debit card details with an alternate code called the “token”, which will be unique for a combination of card, token requestor and device.
This shall be unique for a combination of card, token requestor (i.e. the entity which accepts request from the customer for tokenisation of a card and passes it on to the card network to issue a corresponding token) and the merchant (token requestor and merchant may or may not be the same entity).
Advantage: A tokenised card transaction is considered safer as the actual card details are not shared with the merchant during transaction processing.
Customers who do not have the tokenisation facility will have to key in their name, 16-digit card number, expiry date and CVV each time they order something online.

What is a Card-on-File transaction?

It is a transaction where cardholders authorizes merchants to store their payment information securely and bill cardholders’ stored accounts for future purchases.

Q1: What is a credit card?

A credit card is a financial tool that allows consumers to make purchases on credit, effectively borrowing money from a financial institution (usually a bank or credit card issuer) to be paid back at a later date.

Source: RBI to introduce new channels for Card-on-File Tokenisation