The Reserve Bank of India (RBI) is refusing to budge from its revised December 2021 deadline of disallowing payments aggregators and merchants like Amazon, Flipkart or Netflix from storing customer card details in their database or servers. The payment aggregators are the crucial link in online transactions as they act as intermediaries between the customer and the merchant.
This facilitates one-click faster check out for customers without punching the debit or credit card details. The RBI's decision is actually well thought out due to rising cases of cybersecurity, data theft fears, and also setting minimum online security standards for payments players. But, the decision is certainly going to cause some inconvenience to customers.
Memorise card details, if you can: Come January 2022, you will be required to punch in your card details like the 16-digit number, name, expiry date, and the CVC every time you do a transaction at the merchant outlets or e-commerce website. This will certainly cause some inconvenience if you have multiple cards or have multiple subscription payments running. But the good part is the security and data safety.
Don't expect cash backs and other goodies: The entire e-commerce and payments model works on data. As they say, data is the new oil, the new smart players in the market are using payments data to create or market new products. The non-storage of cards and other customer details will make it difficult for companies to extract more business and hence a disincentive to offer cashback and other goodies. Tokenisation is the solution for all the players in the payments chain as it means hiding the card details with codes, but that will have to be done by the card networks.
UPI is a faster, simple, and better alternative: The growth of UPI (united payment interface) is already cannibalising the debit card business. People are already using UPI more than debit cards. The customers who use a debit card may find it easier to use UPI for payment checkout at the merchant outlets.
Better security: The RBI guidelines are clearly aimed at better security for customers' transactions. There are numerous instances of unauthorised use of customer data, theft, and misuse. While customers have to pay a price in terms of inconvenience, the ultimate gains will be much larger for the economy as it would help in improving the trust in digital transactions.
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