India is making rapid progress in digitalization, with a significant rise in digital payments across the country.
PhonePe has introduced a device tokenization solution for credit and debit cards, bringing a significant change to digital payments.
With this feature, users can make online payments more securely for bill payments, recharges, ticket bookings, insurance purchases, and shopping through PhonePe. This will help reduce online fraud and make payments more convenient.
What is Device Tokenization?
According to the Reserve Bank of India (RBI) FAQs on device-based tokenization, tokenization replaces credit or debit card details with a unique token.
Device tokenization is a secure process that converts your credit or debit card details into a unique token.
Additionally, the token is only valid on the device where it was generated.
This enhances security by reducing the risk of fraud and data leaks while keeping payments safe.
Benefits of Tokenization
PhonePe’s tokenization will make transactions faster and reduce checkout drop-offs.
Users won’t need to enter their card details repeatedly, improving convenience.
Additionally, the payment success rate will increase as transactions can be completed without entering OTP or CVV.
Merchants will also benefit from the expanding network of tokenized cards. In the first phase, PhonePe has introduced tokenization for Visa credit and debit cards.
Over time, other card networks like MasterCard, RuPay, and American Express will also be included.
As more consumers start using this seamless payment method, businesses will gain from higher transaction success rates, an improved customer experience, and a smoother checkout process, leading to growth.
PhonePe stated, “As a leading payment gateway, we are proud to be the first company to provide this solution to all our merchants.”
