A New Era in Tokenization: Introducing Razorpay’s Industry-First Push Provisioning

In the pre-July 2022 era, customers could save their card details on merchant websites using the Razorpay Payment Gateway, making payments seamless across multiple sites. However, the RBI’s card tokenization guidelines effective July 2022 changed this by prohibiting businesses, payment gateways or payment aggregators, and acquiring banks from saving card details on their servers.

Instead, businesses could adopt Card-on-File Tokenization (CoFT), as an alternative to store a token corresponding to the card but not the actual card details. This token is unique for the combination of the card, token requestor (merchant website or app), and consumer device, requiring a new token to be created for every new merchant. Essentially, a cardholder must enter their 16-digit card number, expiry date, and CVV every time they transact at a new merchant. Isn’t that a digital era nightmare?

While these guidelines improved security, they also led to reduced card spends, higher conversion drop-offs, and a cumbersome payment experience. To make card tokenization simpler and seamless, the RBI issued a circular on December 20, 2023, allowing banks to tokenize and save cards across multiple merchant websites or apps through their net banking or mobile banking channels, simplifying the process and enhancing user experience.

In response to all the challenges, Razorpay has introduced Push Provisioning, becoming the first Payment Aggregator (PA) to offer such a solution. Push tokenization platform streamlines this transition, ensuring minimal effort for banks and a smoother experience for businesses and customers alike.

Razorpay’s Push Provisioning: Enabling seamless card push tokenization 

Push Provisioning, India’s first innovative and RBI-compliant push tokenization solution, empowers banks to offer merchants a seamless payment experience with saved cards across multiple merchants via a single platform. The solution enables banks to not only pre-tokenize cards for multiple businesses but also make card activation simpler and easier. This is done by making card tokenization a seamless unified process on a single platform. Cardholders can now easily save their card details with multiple merchants in one step right after activating their card on their bank’s mobile app. To encourage tokenization, they can enjoy exclusive offers and discounts when they tokenize their cards across different businesses.

How does it work?

Step 1: The cardholder receives a message to activate and tokenize their card with a URL to push the token via the platform

Step 2: The cardholder enters phone number and OTP to complete verification

Step 3: The cardholder then enters the 16-digit number of the new card and the expiry date followed by OTP to tokenize and activate the new card

Step 4: The cardholder can then select to tokenize the card on their preferred merchant checkouts from a list of merchants and receive exclusive offers and discounts

That’s it! The customer’s card will be saved on the selected merchants’ checkouts and they can avail their exclusive offer during their next purchase

A triple win for Businesses, Banks, and Buyers!

Businesses

For businesses, this is not just about boosting revenue by improving conversion rates, but also a chance to tap into new customer segments and offer tailored incentives to drive loyalty

1. Increased conversion rates: With push provisioning, customers’ cards are saved on the selected top merchants’ checkouts as a preferred payment method. When cardholders visit these merchant websites or apps, their payment experience will be seamless with the added offer incentive to complete the transaction using the saved card. This reduces drop-offs, increases conversion rates and boosts card spends. Razorpay expects that conversion rates will boost by 5%.
2. Robust customer acquisition channel: With coverage from top and emerging issuers, merchants gain access to new cardholders without additional marketing efforts, expanding their customer base.
3. Seamless integration: Merchants already using Razorpay’s TokenHQ APIs need no additional setup to go live. New merchants can quickly enable push tokenization with simple webhook integration, even if they’re using competitor platforms.
4. Access to cutting-edge tokenization innovations: Tokens powered by Razorpay are future-proof, offering access to upcoming innovations like biometric authentication and issuer tokenization.

Banks

For banks, Push Provisioning is an opportunity to improve card activation spends by incentivising cardholders to save their cards. 

1. Increased card activation spends: Razorpay’s Push Provisioning process verifies cardholder details before tokenization, sending a direct message with OTP verification to ensure card activation. This method is expected to boost card activations by up to 40%!
2. Improved activation rate: Cardholders are motivated to activate their cards as it’s a prerequisite for tokenization, driving up activation rates.
3. Simplified integration: With a single portal integration, banks gain access to all major networks for tokenization, streamlining the process.
4. Access to top merchants: Razorpay’s portal enables banks to tap into a pipeline of top merchants, including those active on other TSPs across India, through network-related issuer solutions.
5. Comprehensive bundled offering: The portal also provides additional features such as token lifecycle management and card renewal flows, offering a complete solution.
6. Cost-effective pricing: This solution is competitively priced, offering banks a cost-effective way to implement tokenization.

Customers

For customers/cardholders, there is now an exceptional – and rewarding – card payment experience as they save their card details through their bank’s portal, eliminating the need to enter card information on every merchant’s website.

1. Improved experience for first-time users: Customers can tokenize their cards directly through the issuer portal when the card is issued, eliminating the need to manually save card details on the merchant’s site.
2. Integrated into card activation: Tokenization is seamlessly integrated into the card activation process, providing a secure and natural step in the cardholder’s journey.
3. Access to exclusive offers: Once tokenized, cardholders can instantly access exclusive offers from select merchants directly through the portal, adding further incentive to use this feature.

Razorpay’s tokens also pave the way for future innovations like Biometric Authentication, keeping businesses and customers at the cutting edge of payment technology. With a strong focus on payments innovation, Razorpay is uniting businesses, banks, and customers, leading a new era in customer experience, loyalty, and security. 

But there’s more—Razorpay is making waves at the fifth edition of the Global Fintech Fest (GFF) 2024, from August 28 to 30, with exciting announcements for banks, merchants, and customers. The industry’s top banks and brands such as MakeMyTrip, BluSmart, PVR Inox, Urban Ladder, Housing.com, Akasa Air, Tata StarQuik, Park+, Treebo, and FernsNPetals have partnered with Razorpay to bring Push Provisioning to life.

Do you want to know how to implement Push Provisioning for your business? Please reach out to card-tokenization@razorpay.com for more information, or get in touch with your Account Manager if you are already a Razorpay client!