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Paytm on Tuesday announced that its wholly-owned subsidiary Paytm Payments Services (PPSL) has partnered with platforms such as Myntra, Oyo, Domino’s and others for its card-on-file tokenisation or "Paytm Token Gateway" service.
The company has also joined hands with payment giants like Visa, Mastercard and RuPay. With these partnerships, the card on file tokenisation service will be available for all of Paytm’s consumers and merchants, the company said.
It is aligned with the Reserve Bank of India’s guidelines stating that “saved cards” feature will not be allowed on a merchant network anymore.
What is tokenisation
With tokenisation, the user’s actual card details are not shared with the merchant. Instead, the card’s details are stored as a unique, irreversible ‘digital token’ instead of a 16-digit number.
This is to ensure that a user’s card details remain only with the user and is not shared with merchants or any third party payment processor. Instead the details are only shared with the issuing bank and the affiliated network. It will also require explicit customer consent via additional authentication.
"This makes way for safe and secure payments for end customers and also helps in mitigating fraud," the company said.
"It is especially critical for e-commerce companies as it will allow them to offer their customers the ease of tokenising debit and credit cards. This means end customers can continue to shop via the saved cards feature, which allows faster checkout," it added.
All merchants/ecommerce stores have to comply with the new card-on-file tokenisation feature by December 31, 2021, according to the RBI guidelines.
Praveen Sharma, MD & CEO, Paytm Payments Services said, “Tokenisation is the future of digital payments and also ensures safety, as a user’s card details are not shared with anyone."
"Our merchant partners can now offer seamless, secure payments to their users. At Paytm, it is of paramount importance to ensure secure digital payments and we are happy to offer Paytm Token Gateway to India’s merchants and online e-commerce platforms along with our partners Visa, Mastercard and Rupay," added Sharma.
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