The Reserve Bank of India (RBI) has implemented the Card Tokenization System to make credit card and debit card transactions secure. The objective of this system is to provide maximum security to the customers for online payment. In such a situation, a question arises in the minds of many people how does card tokenization protect them from online fraud?

What is card tokenization?
Tokenization is a kind of system. It keeps debit or credit card data safe at the time of online payment. In card tokenization, the 16-digit card number, name, expiry date, and code included in the credit or debit card is secured. The card number is converted into a unique number. Card tokenization enables easy contactless payments through third-party apps or websites.

Card tokenization is very important for security. This has reduced the fraud happening while online shopping to an extent. For example, if any merchant's details get hacked, then there is a risk of customer information also being stolen. In such a situation, card tokenization helps in keeping customer data safe.

How does card tokenization work?
In card tokenization, customer information is converted into an alphanumeric ID. This unique ID does not include any customer information. The alphanumeric ID tells the bank where the customer's information is stored. No merchant has the information about this token.
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