Paytm Launches Alternate ID-Based Guest Checkout Solution

Days after the Reserve Bank of India (RBI) proposed new card-on-file (CoF) tokenization measures, fintech major Paytm announced the launch of the industry’s first alternate ID-based guest checkout solution for merchants. Tokenization involves masking the 16-digit debit or credit card number with a unique token specific to one’s card to prevent misuse and theft on merchant websites.

Effortless Guest Checkout

Paytm’s new offering, developed by its subsidiary Paytm Payments Services Limited (PPSL), can be seamlessly integrated into merchants’ apps or websites. This feature empowers end customers to complete their transactions as guests without storing sensitive card details. This innovative solution creates an alternate ID for customers, simplifying the transaction process by requiring only the entry of complete card details instead of account information and passwords for occasional purchases.

Enhanced Data Security

This initiative is expected to significantly reduce data breaches, as merchants will no longer need to retain sensitive customer data for sporadic purchases. Moreover, Paytm’s service adds an extra layer of security by eliminating the need to pass a user’s card details to subsequent entities in the transaction flow for authorization and processing.

Streamlined Purchases

Additionally, Paytm’s service will expedite purchases and streamline the account creation process on merchant websites by sharing additional information. A spokesperson from PPSL stated, “As the first to go live with an Alternate ID solution, we continue to innovate and bring merchants the best payment solutions. This eliminates core risks like misuse of sensitive card information and aligns with RBI’s guidelines to provide a secure transacting experience to our users. We continue to focus on compliance and safe payments for all.”

Revolutionizing CoF Tokenisation

The RBI’s CoF tokenization feature previously required users to save their card details on the merchant platform as a token to uniquely identify a card number. However, this security feature was not available for guest checkout-based transactions. With its new offering, PPSL now allows users to use an alternate ID for guest checkout, replacing actual card numbers.

RBI’s CoF Tokenisation Mandates

The central bank introduced CoF tokenization mandates in October 2022, enabling merchants and payment aggregators to store tokens of card details for payment processing instead of actual card details. Under current rules, card tokenization can only occur on a merchant’s website or app during payments. However, RBI Governor Shaktikanta Das recently proposed the introduction of CoF token creation facilities directly at the issuer bank-level, allowing users to create these tokens on their bank’s website or app instead of e-commerce websites or other merchants.

Impressive Tokenization Statistics

According to the central bank, more than 56 crore tokens have been created, and transactions worth INR 5 lakh crore have been processed using these tokens, highlighting the significance and impact of CoF tokenization in the payment industry.