Tokenization Just Added a Layer Of Safety To Online Shopping

Hello Fellas! Finally, the festival season is here and we are all set to get drenched in the happiness and festive mood with our near and dear ones. Well, I too have started prepping myself with the to-do list to not miss anything and enjoy the festivities to the core. The first and foremost thing to make the most of this shopping season is to indulge in a shopping spree.

The ongoing sales on the major e-commerce platforms are giving me yet another reason to shop my heart out. But recently while making the payment for one of my purchases, the e-commerce site asked me to store my card details. When I enquired more about it, I came to know about the tokenisation concept for card transactions which has been introduced by the Reserve Bank of India (RBI) and is going to be effective from October 01st, 2022.

So, in this post of mine, I am going to discuss what is tokenisation, how it works & what are its benefits, etc.

What is Tokenization

According to RBI’s website, tokenization refers to replacing the actual card details with an alternate code, referred to as ‘token’. Tokenization will replace sensitive payment credentials such as 16-digit plastic card numbers, names, expiry dates, and codes with a unique alternate card number, or ‘token’, which shall be unique for a combination of card, token requestor and device. Hence, merchants and fintech platforms would not be able to store your card details anymore.

How Tokenization works and how it is useful

Nowadays, considering the ease and accessibility, online transactions have become quite common. Generally, the card details that a customer enters get stored and from the next time only CVV details need to be entered. However, this can lead to cyber crimes. Hackers are using keystroke logging through malicious software to access the credit card details of the users. Hackers share dubious or suspicious links, which take the customer to a payment page and unknowingly install malware on their system which records the card details.

Think of another situation where the merchant’s website gets hacked.

In both, the above scenario, the customer’s financial details will be leaked. This is where tokenisation comes into the picture. With card details getting converted into a unique token, specific to the card and saved with only one merchant at a time, such cyber crime incidences can be prevented to a greater extent.

Benefits of Tokenization

1) Enhanced Safety and Security

2) The convenience of swift checkouts

3) No more ‘False Declines’

4) Minimizes the risk of data leakage and transaction fraud

5) Keep track of all of your cards and merchants they have been tokenized with.

6) No need for a physical card for online payments

Well, it is rightly said that it is better to be safe than sorry! With the rising adoption of digital payments, it is really good to see that the apex regulatory bank is taking steps to enhance payment security and major e-commerce giants such as Amazon are well prepared to implement the guidelines. However, there might be some customer disruptions as October 1 rolls around because of the fact that many smaller merchants still have not been able to set up the required infrastructure or even test their systems. More time for complete implementation of tokenization may be needed in such a case.

If you want to know more details about tokenization, then you can visit FAQs on Tokenisation by RBI @

If you have any queries/questions then feel free to connect with me through the comments below.

Wishing you all a very Happy Festive Season! Stay Blessed!


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26 thoughts on “Tokenization Just Added a Layer Of Safety To Online Shopping”

  1. This extra layer of security is much-needed step from the government and ecommerce platforms.

  2. Tokenization is a great step towards safety. Waiting to see how people are going to receive it.

  3. This was an important step to take and am happy that RBI has finally made it.

  4. Tokenization has given a relief to card users who are purchasing almost everything online through cards

  5. Tokenization is actually adding a layer of safety to our online purchases making it even much safer

  6. This added layer of safety was a must to attack on breachers and make them realize what they do is an offence.

  7. Tokenization looks like a very useful concept. Do other countries also have it?

  8. we can be carefree while shopping online now after the implemtation of tokenization

  9. Although nothing can guarantee 100% safety in monetary transactions, tokens will make it relatively safer.

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