Facts for Prelims (FFP)
Source: Mint
Context: The Reserve Bank of India (RBI) has expanded the scope of card-on-file tokenisation (CoFT) to include card issuing banks and institutions directly, moving beyond services provided through merchants.
- CoFT is a security measure for users opting for digital payments, replacing the practice of merchants storing card details with specially created tokens.
- RBI’s recent notification outlines the requirements for enabling CoFT through card issuers, allowing customers to generate tokens through mobile and internet banking channels with explicit consent and additional validation.
Tokenization is the process of replacing sensitive data with a non-sensitive equivalent, called a token. Tokens are random strings of characters that have no meaningful value if breached. They serve as a reference to the original data, but cannot be used to guess those values.
