Definition
Tokenisation of Cards
Card tokenisation replaces your actual card number stored by merchants with a unique, device- or merchant-specific token, so real card details are never saved or exposed online.
Under RBI rules, merchants and payment players generally cannot store your real card number; instead they store a token — a surrogate value that maps back to your card only within the secure systems of the card network and your bank.
When you save a card on an app or website, you authenticate once and a token is created for that merchant or device. If that merchant is breached, the leaked tokens are useless elsewhere, sharply reducing fraud risk from stored cards.
Tokenisation underpins faster, safer repeat checkouts and features like device tokens in phones; you can view and delete saved tokens through your bank's controls.
Related terms
- Payment Gateway (PG)A payment gateway is the technology layer that securely transmits a customer's payment details from a merchant's checkout to the banks and networks that authorise the transaction.
- RuPayRuPay is India's home-grown card payment network, built by NPCI, that powers debit, credit and prepaid cards as a domestic alternative to international networks.
- Virtual CardA virtual card is a digitally generated card number, linked to your real card or account, used for online payments to limit exposure of your primary card details.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.