Imagine this: one of your customers is about to check out. They’ve shopped with you before, so their card is already saved on your site. All they need to do is click “Pay.”
But behind the scenes, something important is changing in how those cards are saved and used.
That’s where card tokenisation comes in.
So, what is card tokenisation?
Imagine your 16-digit card number (PAN) as your passport. It’s the ultimate identity document in the payments world. But here’s the thing — you wouldn’t hand over your passport at every single checkpoint on a trip, would you? Too much risk if it got copied, lost, or stolen.
That’s where tokenisation steps in.
Instead of flashing your passport everywhere, the card networks (Visa, Mastercard, RuPay, etc.) issue you a boarding pass. This pass is valid only for your specific journey (say, a purchase with a particular merchant on a specific device). It lets you through the gates just fine — but drop it outside the airport and it’s worthless.
The beauty of it? Even if someone “steals” this boarding pass (the token), they can’t use it for another flight (merchant), another route (channel), or another passenger (device).
In short: your passport stays safe in your pocket, while the boarding pass does the traveling. That’s card tokenisation.
Why does it matter to merchants?
For merchants, tokenisation is more than just a compliance requirement. Here’s why it’s a big deal:
- Security & Trust → Tokens protect sensitive card data, lowering the risk of breaches. Customers feel safer saving cards.
- Better Conversions → Saved tokens mean fewer cart abandonments. Returning customers can pay with a click.
- Smarter Lifecycle Management → Tokens automatically update when customers get a new card (e.g., expiry or reissue). No more failed transactions because of old card details.
- Global Standard → Tokenisation is being adopted worldwide. In India, it’s already the norm.
What’s happening in India?
The RBI (Reserve Bank of India) has made tokenisation mandatory for stored cards. This means:
- Merchants, PSPs, and payment gateways cannot store actual card numbers.
- Only card networks (Visa, Mastercard, RuPay, Amex, etc.) can issue and manage tokens.
- Customers must give consent and authenticate (with OTP or other two-factor authentication) before a card can be tokenised.
- Tokens can only be used with the same merchant who requested them.
So if your customer saves their card on your site, the token you get is unique to your business only.
The BoxPay View
At BoxPay, we see tokenisation as a win-win. Merchants get:
- Higher approval rates (since tokens stay fresh even after card reissues),
- Reduced risk (no sensitive PAN data in your systems),
- A smoother checkout (because customers can pay instantly).
Our role as a payment orchestrator is to make this transition simple. We integrate with PSPs and networks so you don’t have to deal with the heavy lifting.
Final Word
Card tokenisation isn’t just about RBI regulations—it’s about building trust and conversion in digital payments.
For merchants, the key takeaway is this:
👉 If you enable card tokenisation, you’ll reduce risk, improve customer experience, and stay compliant—all at once.
✅ Next Step: Want to know if your current checkout supports network tokens? Reach out to your BoxPay account manager—we’ll help you navigate it.