In the world before July 2022, customers could save their card details on a merchant website platform using Razorpay Payment Gateway. The saved card would be available at every other merchant website using Payment Gateway of Razopay making card payments seamless and frictionless.
Tokenization guidelines by the Reserve Bank of India (RBI) came into effect in July 2022, that prohibited businesses, payment gateways or payment aggregators, and acquiring banks from saving card details on their servers. It stipulated that the card details could be stored only by issuing banks and networks.
While businesses are not allowed to store customer card details on their servers, they 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?
Despite its salient features for online fraud mitigation and data security, the current guidelines pose challenges across the ecosystem: Reduction in card spends for banks, churn to UPI, higher drop-offs in conversion rate for businesses and cumbersome payment experience for cardholders
To make card tokenization simpler and seamless, the RBI has issued a circular (dated December 20, 2023) that allows banks to tokenize and save cards on multiple merchant websites or apps through their net banking or mobile banking channels.
The main aim of this move is to make card tokens available for cardholders via banks from the first transaction on merchant websites and deliver an enhanced experience while boosting card spends for banks.
If you are worried about how to enable tokenization for your business, here is a reliable industry-first push tokenization platform from Razorpay. We have done all the heavy lifting and ensured that minimal effort is required from the bank’s end in this transition.
Razorpay Push Token Provisioning: Enabling seamless card push tokenization for banks
Razorpay Push Token Provisioning, India’s first innovative and RBI-compliant push tokenization solution, empowers banks to offer their customers a seamless payment experience with saved cards across multiple merchants via a single platform.
Push Token Provisioning solution enables banks to not only pre-tokenize cards for multiple businesses but also makes card activation simpler and easier. This is done by making card tokenization a seamless unified process on a single platform. Cardholders are incentivized to tokenize their cards for multiple merchants by extending exclusive offers and discounts.
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: Cardholder enters phone number and OTP to complete verification
Step 3: Cardholder then enters the 16-digit number of the new card and expiry date followed by OTP to tokenize and activate the new card
Step 4: 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! Customer’s card will be saved on the selected merchants’ checkouts and they can avail the exclusive offer during their next purchase.
Key benefits of push provisioning:
- Increase in card spends: 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.
- Frictionless payments: With pre-tokenized cards, cardholders wouldn’t need to enter the card details while making the payment using cards. This reduces the steps and the friction that comes with it, making the entire checkout experience quick and seamless.
- Increase in card activation: As per RBI guidelines on card activation, banks are required to collect OTP-based consent if cards are not activated within 30 days of issuing. Push provisioning activation process verifies the cardholder’s details before tokenization. A direct message to cardholder along with OTP-based verification with push tokenization ensures that the card gets activated which boosts card activations.
Do you want to know how to implement Push Token Provisioning for your business? Please reach out to: email@example.com for more information or get in touch with your Account Manager if you are already a Razorpay client.