PhonePe launches device tokenisation for credit and debit card transactions

This is a first among companies that have decided to offer direct solutions to customers without requiring a merchant's reliance on third-party payment orchestration platforms

PhonePe on Monday rolled out a device tokenisation solution for credit and debit cards to enable users to tokenise them on the company’s application, and use it seamlessly across various services on its platform like bill payments, recharges, booking travel tickets etc.

 

It comes weeks after the Fintech major announced a plan to directly integrate its payments solutions for its merchants. PhonePe is first among companies which decided to offer direct solutions to customers without the need of a merchant’s reliance on third party payment orchestration platforms.

 

Tokenisation refers to the replacement of card details with alternative codes known as tokens. These tokens are unique for a combination of card, requester of the token, and devices. A tokenised card transaction is considered safer as the actual card details are not shared with the merchant during transaction processing, according to the Reserve Bank of India (RBI).

 

 

The feature would enable users to utilise card tokens across use cases such as bill payments, recharges, booking travel tickets, insurance purchases, payments on its Pincode platform.

 

The Bengaluru-based company said the feature would be open to online merchants where its payment gateway services are integrated. Users will be able to tokenise their Visa credit and debit cards.

 

PhonePe said its users will no longer need to save their card details on merchant platforms or enter a CVV for every transaction, leading to higher success rates and fewer drop-offs at checkout.

 

“We plan to expand this offering by integrating with more card payment networks and enabling access to the device tokenised cards to all PhonePe PG merchants. At PhonePe, we have always focused on building innovative solutions that enhance customer trust and convenience,” said Rahul Chari, co-founder and chief technology officer (CTO), PhonePe.

 

At present, the company has over 590 million registered customers and over 40 million registered merchants.

 

Earlier this month, the firm announced it was exiting from account aggregator (AA) business and surrendering NBFC-AA licence to the RBI -- about two years after securing it.

 

Account aggregators are non-banking financial companies (NBFCs) that deliver a user’s financial data from financial information providers (FIPs) to financial information users (FIUs).

 

India’s largest fintech firm attributed its decision to quit the AA business to its inability to on-board as many FIPs as it “would have liked” due to its competing nature of priorities.