Tokenised Payments Guide: The Future of Secure Digital Transactions in India
Tokenisation is transforming how India handles digital payments — replacing sensitive card and account details with secure tokens to prevent fraud and protect users. This guide explains what tokenised payments are, how they work, and what they mean for users & merchants in 2025.
💡 What are tokenised payments?
Tokenisation is a security process that replaces a card number or bank account details with a unique token — a randomly generated identifier that has no intrinsic value if intercepted. Merchants store tokens instead of actual card numbers, while the issuer (bank or card network) securely stores the sensitive data.
🔐 How Tokenisation Works in Payments
- Customer Initiates Payment — When you save a card or make a payment.
- Token Request Sent — Merchant or payment gateway sends details to the bank.
- Token Generated — The card issuer (like SBI, HDFC, ICICI) creates a token instead of using the real card number.
- Secure Storage — Only the token is stored with the merchant — your card info stays safe with the bank.
- Payment Processed — Every transaction validates the token + UPI PIN or OTP.
Benefits for users & merchants
- Better security: Card data is not stored on merchant servers, reducing breach risk.
- Smoother UX: Customers can "save" cards without security trade-offs; checkouts are faster.
- Reduced PCI scope: Merchants storing tokens face lower PCI compliance burdens.
- Compatibility: Works with e‑commerce, in‑app, contactless (NFC) and subscription payments.
RBI rules & compliance (short overview)
To curb data breaches, the Reserve Bank of India (RBI) mandated limitations on storing card data on merchant servers and promoted tokenisation as the secure alternative. Banks, card networks and payment gateways in India now support RBI‑compliant tokenisation flows. (For merchant implementation details, consult your acquiring bank or PSP.)
⚙️ How to enable tokenisation for your cards
Most UPI & payment apps and modern banks let you add a card and opt into secure token storage. Example steps:
- Open your payments app (Google Pay, PhonePe, Paytm, BHIM).
- Add card & complete OTP verification.
- When prompted, choose the "Save card securely / Tokenise" option.
- For recurring payments, ensure the merchant supports tokenised recurring tokens (TCR).
🤖 Find IFSC Code on Telegram – 1 Click!
Join 10,000+ users who use our free Telegram Bot daily to find IFSC codes in seconds.
🔍 Open IFSC Finder BotFAQ — Tokenised Payments
What is tokenisation in digital payments?
Tokenisation is a process that replaces sensitive card or IFSC details with a secure, random token — ensuring your real data is never exposed during online transactions.
Is tokenisation mandatory in India?
Yes. As per the RBI guidelines, merchants cannot store your actual card details. They must use tokenisation for all card-based online payments.
Is tokenisation 100% safe?
Tokenisation greatly reduces the risk of card data theft because merchants never hold the original card numbers. However, users should still follow general security practices like using trusted apps and not sharing OTPs or PINs.
Will tokenised cards work on all merchants?
Most modern merchants and payment gateways support tokens. Older legacy systems that require raw PANs may still need a migration path; acquiring banks typically assist with integration.
Can I disable tokenisation if I don’t want it?
Yes, most UPI and card apps allow you to delete or revoke a token anytime from settings.
How do I remove a saved token?
You can remove saved cards/tokens from the payments app or merchant's payment settings. Removing a token prevents future charges from that tokenized reference.
Conclusion
Tokenisation is a key security layer for modern digital payments. For users it means safer saved cards and smoother checkout; for merchants it reduces compliance exposure and fraud risk. As India moves toward broader token adoption, expect faster, more secure payment experiences across apps and e‑commerce platforms.
