Tokens can be device-specific, retailer-specific or even use case-specific. It is a service offered by leading card networks all around the globe.
While both Visa and Mastercard have been pushing contactless payments in India, there is an apprehension among users. Contactless payments removes the need for one time password, which is considered the second layer of security. However, tokenisation could play a huge role in building customer comfort for the new forms of card payments.
Tokenisation would be available for use cases such as contactless transactions, in-app payments, and QR code-based payments.
The central bank said that the facility shall be offered only through mobile phones or tablets at present. Its extension to other devices will be examined later based on experience.
Visa believes that tokenisation is being driven in large part by changing consumer behaviour which is starting to embrace mobile technology.