The Reserve Bank of India (RBI) wants you to memorise 16-digit debit and credit card numbers, expiry dates, and CVV codes. Why is this so?

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The Reserve Bank of India (RBI) is adamant about its amended data storage policy requirements. The RBI has rejected payment gateway businesses' proposal for a new regulation that is set to take effect in January 2022. Payment aggregators and retailers like Amazon, Flipkart, and Netflix are prohibited from retaining card information on their systems or databases under the new legislation. Between the customer and the aggregators, the bank serves as a vital link.

Customers who use debit or credit cards will have to punch in their 16-digit card number every time they make a transaction as a result of the new policy. This will undoubtedly make things more inconvenient, but the goal of the modification was to safeguard card information and ensure that payment processors did not store it on the system.

Why should you remember your credit/debit card's 16 digits?

If the changes take effect in January 2022 as planned, customers will be required to enter their 16-digit card number, expiration date, and CVC for each transaction. This is true whether you're using an e-commerce platform or a merchant website. Customers with several cards or running subscriptions will find this particularly inconvenient, but the purpose is safety and data security at the end of the day. That being stated, you should memorise those 16 numbers to make the process go as smoothly as possible.

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The entire e-commerce payment process is dependent on saved data; these businesses utilise this data to promote new things to certain client demographics depending on the information they have. This prohibition on data storage will make it more difficult for them to target certain products or offers to their clients. These players could use tokenization as a solution, but that would entail disguising the card details with codes.

Switching to UPI (Unified Payment Interface):

With increased security extending the checkout or transaction process, UPI could become the preferred method of payment. UPI payment methods have grown in popularity in recent years due to their speedy and simple payment procedures. Customers with debit cards may find it easier to pay on merchant platforms using UPI.

What Changed?

Due to the fact that the new laws have not yet taken effect, merchant sites and payment gateways are allowing cardholders to save their information on their databases with only a minimal layer of protection to authenticate it. Typically, the CVV (card verification value) and a one-time password are used (OTP). This, as well as the desire for a repeal in the new guidelines, were both denied by the RBI. The top bank had planned to implement the new standards in July but had to delay them by six months due to banks' lack of readiness. The RBI has gone over and above to safeguard customer security by prohibiting payment aggregators from retaining customer card details on their platforms that are accessed by merchants.

Even authorised card operators will be unable to access data in order to process chargebacks, grievances, and resolve difficulties once the new restrictions take effect. Even while the quick and easy process is hampered in some ways, it provides data security, which is the optimum quality of operations in the end.

(Source: News18)