The Reserve Bank of India (RBI) on Thursday extended card tokenisation deadline by six months to June 30, 2022, amid requests from industry stakeholders. The earlier deadline was December 31, 2021. 

After June 30, 2022, merchants will not be able to store card information of users and will have to replace each card number with a randomised token number. 

“The timeline for storing of CoF (card on file) data is extended by six months, ie, till June 30, 2022; post (sic) this, such data shall be purged,” said RBI on Thursday. 

“In addition to tokenisation, industry stakeholders may devise alternate (sic) mechanism(s) to handle any use case (including recurring e-mandates, EMI option, etc) or post-transaction activity (including chargeback handling, dispute resolution, reward/loyalty programme, etc) that currently involves/requires storage of CoF data by entities other than card issuers and card networks,” the RBI added in the statement. 

Merchants have lately sought at least six more months to implement new card data storage norms, saying that any haste in enforcement may cause major disruptions, erode trust in digital payments and loss of revenue. The system, including banking entities, is still not fully ready to comply with the RBI’s CoF tokenisation deadline of December 31, 2021, they said. 

Seeking a phased implementation of new norms, the Merchant Payments Alliance of India (MPAI) and the Alliance of Digital India Foundation (ADIF) said that merchants should get a minimum of six months to comply with post-readiness of banks, card networks and payment aggregators/payment gateways. 

There was also a need to create consumer awareness about the impact of the policy change, industry lobby groups had said in a joint letter to RBI. 

Online merchants can lose up to 20-40 per cent of their revenues after December 31industry body CII said: “Online merchants can lose up to 20-40 per cent of their revenues post 31-December, and for many of them, especially smaller ones, this would sound the death knell, causing them to shut shop," CII had said. 

India had an estimated 98.50 crore cards, which were used for about 1.5 crore daily transactions worth Rs 4,000 crore, CII said. 

The value of the Indian digital payments industry in 2020-21, according to the RBI’s annual report, was Rs 14,14,85,173 crore, it said, adding that digital payments had triggered and sustained economic growth, especially through the trying times of the pandemic.