Fintech platform Razorpay has announced a new tokenisation solution for businesses in India to enable their end-customers to continue experiencing the convenience of saved card transactions, now with added security and in compliance with RBI guidelines.

The solution termed ‘Razorpay TokenHQ’ is a multi-network Card-on-File (CoF) Tokenisation solution that will work across all major card networks including Mastercard, RuPay, and Visa.

Almost the entire base of five million businesses using Razorpay’s services will be ready to support tokenised card transactions.

RBI guidelines

Earlier this year, the Reserve Bank of India had issued a new set of guidelines that disallow businesses, payment aggregators, and acquiring banks from storing customers’ credit/debit/prepaid card information. The new guidelines allow only card networks and card issuers to store customer card information, and sanctions businesses to use tokens for offering saved card experience during online payments.

Benefits of tokenisation

COF tokenisation is the process of turning sensitive cardholder data into a string of randomly generated numbers called a “token”, which has no meaningful value if breached. All stakeholders are required to ensure full compliance with the tokenisation framework by 31st December 2021.

Also see: NPCI launches NTS platform for card tokenisation

In absence of tokenisation, customers will have to enter their card information manually, every time they transact online. This can be an inconvenience to customers and increases the chances of error in entering data leading to transaction failures.

“Tokenisation, as a technology solution bridges this inconvenience gap and enables customers and businesses to sustain “business as usual”, by converting customer card information into a coded “token”,” Razorpay said in an official release.

Homegrown solution

Shashank Kumar, CTO and Co-founder, Razorpay, said, “The RBI has been making great strides to enhance the security and convenience of digital payments in India. Newer regulations offer tremendous opportunities for us to innovate and develop localised solutions that work well for Indian businesses. Tokenisation is one such regulatory development, and Razorpay TokenHQ is a homegrown solution that will enable businesses to continue to offer seamless payments while ensuring individuals have control over their card data.”

He further added, “There are over 950 million debit & credit cards in India and this number will only grow given the rise of non-cash transactions in India’s hinterlands. We hope to see a lot of developments in building smart, secure fintech solutions for businesses and their end-users in the times ahead.”

Available for all businesses

Razorpay TokenHQ will be available for all businesses as well as merchants using other payment gateways. Merchants can use Razorpay’s solution to tokenise cards and route payments using their existing payment partnerships.

Also see: Coming soon, new framework for offline digital payments

Merchants with customised setups can start integrating Razorpay TokenHQ through APIs.

Using Razorpay TokenHQ, businesses would be able to create, process, delete and modify tokens for online card payments with customers’ consent.