New RBI Rules on Online Card Transactions to Now Take Effect From July 1, 2022

Starting July 1, 2022, e-commerce companies such as Amazon and Flipkart or online delivery aggregators such as Zomato won't be able to save card information on their platforms, under new guidelines from the Reserve Bank of India (RBI). As per the new rules, customers carrying out an online transactions on any e-commerce platform will need to enter their debit or credit card details each time starting next year. However, customers can avoid the hassle and choose to provide consent to the platforms to tokenise their cards.

Back in March 2020, RBI issued guidelines which restricted merchants from saving customers' card details in order to boost security. In September this year, the regulatory body enhanced its guidelines on card tokenisation services in order to improve the safety and security. "The tokenisation of card data shall be done with explicit customer consent requiring Additional Factor of Authentication (AFA)," RBI had said in a press release. To note, the deadline for merchants and other payment aggregators for storing card data was first set as June 30, 2021, then extended to December 31, 2021, and now, has been extended to June 30, 2022.

Only Mastercard and Visa-issued cards can be tokenised as of now
Photo Credit: Screenshot/ Gadgets 360

Tokenisation helps replace card details with a unique algorithm-generated code, or token, which allows online purchases to go through without exposing card details.

So, what does this mean for a regular customer? Here are 10 quick takeaways:

Editor's note:: An earlier version of this article mentioned RBI's December 31, 2021 deadline, which has since been extended till June 30, 2022. The article has been updated to reflect this change.