Tokenization in 2022?
Our credit card details get stored in more and more places (digital and physical). And periodically we hear of hackings e.g. Domino’s India (1 million card details) and Marriott hotel (exposed 500 million guest records worldwide). But what alternative do we have? In theory, we could key in the card details for each transaction (and turn off the “save card details” option), but that’s too painful… In India, the RBI has come up with a solution - “tokenization” . Setting aside the delay (from 1-Jan to 30-Jun), let’s look at what tokenization means, and how it would help with the data hacks risk. Here is how tokenization would work: You install the app for the site e.g. Amazon, Myntra, whatever. When it comes to making the payment, you do not enter your card details. Instead, when you click the payment button, the app places a request to the credit card company (VISA, MasterCard etc) to initiate the payment. The card company then generates a one-time, uniqu...