RBI extends the scope of tokenization to wearable and IoT devices

On Wednesday, the Reserve Bank of India (RBI) expanded the scope of ‘tokenization’ to include laptops, desktops, wearables such as wristwatches and bands, and Internet of Things (IoT) devices. Tokenization refers to the substitution of actual card details with a unique alternate code called the ‘token.’ This token is unique for a combination of card, token requestor, and identifiable device. The aim of tokenization is to improve the payment system’s safety and security.

Earlier, RBI had allowed ‘tokenization’ services on cardholders’ mobile phones and tablets. In a circular, the RBI stated:

On a review of the framework and keeping in view stakeholder feedback, it has been decided to extend the scope of tokenisation to include consumer devices — laptops, desktops, wearables (wristwatches, bands, etc.), Internet of Things (IoT) devices, etc.

Banks have even started to experiment in the domain, with the Axis Bank already having a range of wearable devices for contactless payments.

You can read the official notification here.

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Rajat Chawda

Rajat is a student at the Institute of Law, Nirma University. Since a young age, he was fascinated by the technological advancements and his fascination with gadgets has helped him develop a keen interest in TMT Laws in his journey as a law student. He is associated with Mylawrd to further engage himself and learn in this area.

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