RBI extends scope of tokenisation to laptops, wearable devices

The Reserve Bank on Wednesday extended the scope of 'tokenisation' to several consumer devices, including laptops, desktops, wearables like wristwatches and bands, as well as Internet of Things (IoT) devices. Tokenisation, which aims at improving the safety and security of the payment system, refers to the replacement of actual card details with a unique alternate code called the 'token', which is unique for a combination of card, token requestor and identified device.

The RBI had earlier permitted 'tokenisation' services, under which a unique alternate code is generated for transaction purposes, on mobile phones and tablets of cardholders.

"On a review of the framework and keeping in view stakeholder feedback, it has been decided to extend the scope of tokenisation to include consumer devices -- laptops, desktops, wearables (wristwatches, bands, etc.), Internet of Things (IoT) devices, etc," the RBI said in a circular.


The initiative is expected to make card transactions more safe, secure and convenient for the users, it added.

In January, 2019 the RBI had issued guidelines on "Tokenisation - Card transactions", permitting authorised card networks to offer card tokenisation services to any token requestor, subject to conditions.

Prior to the latest circular, the facility was available only for mobile phones and tablets of interested cardholders.

RBI also noted that there has been an uptake in the volume of tokenised card transactions during recent months.