The extension of the implementation deadline for the Card on File tokenization by the RBI is a welcome gesture from the Central Bank. There were concerns across all stakeholders in the payment ecosystem around readiness. Merchants were also fearing payment disruptions and revenue losses as a result. The extension comes as a breather for all stakeholders.
“ADIF thanks RBI for making the extension taking into account the concerns and challenges around ecosystem readiness to make a full transition. We also call upon the RBI to take steps to ensure readiness across all banks. Should bank readiness not come through in a timely and robust manner, we stand the risk of finding ourselves in the same predicament again in June as now.” – Sijo Kuruvilla George, Executive Director, ADIF.
Ecosystem readiness is a sequential process, with bank readiness being the vital first link in the chain. We urge RBI to make an assessment of readiness across all banks and make this information publicly available. Unless banks are compliant, merchants will not be able to successfully process tokenized transactions and have solutions consumer ready.
It is equally important that consumer education and awareness is given the required importance and not just the technical aspects related to the switch to tokenization. It is only when consumers are aware of tokenization and its benefits, that they will be able to make an educated choice for opting in. It is also the RBI & banks that are best positioned to lead this consumer awareness drive; and it is only with informed opt-in by all or a large majority of card holders that we will be able to make an effective transition into the new tokenization regime.