‘Tokenisation good, but only if done right!’ Dr Aruna Sharma, Former Member, RBI Digitisation Committee

APN News, December 18, 2021

Speaking in a webinar organised by Consumer Unity & Press Society (CUTS) Implementing RBI’s Tokenisation Circular in Consumer Interest’, Dr Aruna Sharma, IAS, former secretary to the Government of India & Member, RBI Digitisation Committee voiced her support for RBI’s move to permit Card on File Tokenisation (CoFT).

In the same breath, she also cautioned against the stringent deadline of 31st December 2021, i.e., less than four months given for operationalising it. She further opined that consumers may be forced to re-enter all their card details for making each card-based online payment, in case CoFT was not implemented by the deadline for merchants on purging stored card details.

Dr. Saurabh Garg, Chief Executive Officer (CEO), UIDAI, cited the tokenisation system of Aadhaar as a successful example of tokenisation, and highlighted its capability to process more than five to six crore transactions daily. He further emphasised on the need for a balance between ease, security and quality of service, in order to ensure consumer welfare in its true sense.

Mr. Vijay Chugh, Former Head, Department of Payment & Settlement Systems, RBI, emphasised on the need for inclusive and adequate stakeholder consultation in regulation making. Coming out with white papers for public feedback was considered imperative in this regard, which was crucially missing in RBI’s tokenisation circular.

Contributing to the discussion, Ms. Asheeta Regidi, Associate Director – Policy, Cashfree, called for prioritising the need for creating digital payments infrastructural preparedness for implementing CoFT. She opined this to become more important in light of the poor consumer experience due to the recent lack of timely implementation of RBI’s recurring payments mandate.

Mr Pradeep S Mehta, Secretary General, CUTS, laid special emphasis on protecting the interests of vulnerable consumers, such as new-to-digital consumers, number illiterate consumers, senior citizens and persons with disabilities. He cautioned against a disproportionate adverse impact on them, on account of additional difficulties they may face in re-entering their complete card details for every online transaction.

Mr Amol Kulkarni, Director – Research, CUTS, discussed the key findings of a national level survey conducted by CUTS, on the subject. These included the risk of consumers reducing the frequency of card-based online transactions, and moving to other modes of payment including cash on delivery, instead of re-entering all their card details for every transaction on different platforms. This was opined to possibly dent the government’s vision of a Digital India.

Other notable speakers in the webinar included Mr Srikanth Lakshmanan, Founder, Cashless Consumer, Ms Gowree Gokhale, Partner, Nishith Desai Associate, and Mr Mandar Kagade, Founder and Principal, Black Dot Public Policy Advisors. They recommended the RBI to set-up an appropriate consumer grievance resolution forum with respect to digital payments, undertake consumer awareness and education programs, and also to avoid setting hard deadlines, especially without adequate stakeholder consultation.

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