RBI's new rules are slated to come into effect from January 2022. After that, platforms like Amazon, Netflix, Flipkart and others will not be allowed to store card details of customers.
The customers will have to fill in their credit or debit card details like 16-digit number, CVV and expiry date every time they make an online purchase as per the new guidelines of the Reserve Bank of India (RBI). The new guidelines for online payment platforms are expected to come to effect from January 2022. According to the new rules, the online payment platforms will not be allowed to store card details of the customers.
Though the central bank wanted the new rules and regulations to come into effect from July 2021, it was postponed by six months as majority of the commercial banks were not ready to implement the change.
These new regulations will prevent payment aggregators, online payment platforms and e-commerce players like Flipkart and Amazon from storing information of a user’s card on their servers or databases. This means that every time a customer makes an online purchase or renews a subscription on Netflix, the details will have to be filled in. This step by the central bank is likely to slow down the process of transactions. However, by preventing such payment portals and e-commerce websites from storing customers’ card information on their servers and databases, the new regulations will ensure customer safety and data security.
However, as per the new RBI guidelines, the credit card operators will be allowed to store card details for redressals and dispute resolution purposes.
Since online payment using credit and debit cards will become more time-consuming, people may shift to a different payment method like the Unified Payment Interface (UPI). The payment method does not require any such information once the app is linked to a customer’s bank account.
As of now, the majority of e-commerce merchants and payment gateways store customer data on their servers. They use this stored information to verify and approve transactions, with CVV and OTP being the only requirements.
If these changes take place on schedule, customers will need to input all the information for each and every transaction. Therefore, it would serve users well to memorise those 16 numbers to smooth out the process as much as possible.
(Edited by : Shoma Bhattacharjee)