The Reserve Bank of India (RBI) has introduced a new service called ‘Card-on-File’ (CoF) token facility.
This allows customers to create a special code for their debit or credit card and connect it to various e-commerce apps.
Previously, this code could only be made through the seller’s app or website.
By using this code during online payments, customers can complete transactions without sharing their card details.
All the details will be in a virtual code
The implementation of this card tokenization system helps protect against data theft and financial fraud.
The RBI stated in a notice that “COF tokens can now be created directly through the banks that issue the cards.
This gives cardholders the option to create codes for multiple sellers at once.
In the COF token, information like the 16-digit card number, card expiry date, and CVV number will be replaced by a virtual code.
This is a secure way to make online transactions, although not every cardholder needs to use this feature.
It provides a safe method where real card information doesn’t need to be shared.
The RBI introduced CoFT in September 2021, and it was put into effect on October 1 of the same year.
The circular also mentioned that COFT generation should only happen with the customer’s agreement and an Additional Factor of Authentication (AFA).
According to the RBI, if a cardholder chooses to create codes for multiple sellers, AFA verification may be required for each seller.
Cardholders can create these codes at their convenience, either when they receive a new card or at a later time.
