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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