Introduction

• India has embarked on an ambitious transformation journey to realize its vision of a Digital India. Digital and Financial Inclusion are key enablers to march towards a Digitally empowered Society and a Knowledge Economy. With Government and Industry moving towards a 'Less Cash Economy', Digital Payment channels have caught momentum and citizens across the country are adopting various modes of digital payments. Government, Industry and all stakeholders in the digital payments ecosystem need to partner to build awareness among users about security and safely transact online.
• With increase in the number of cashless payments, customers’ financial information is increasingly at risk. In this scenario, tokenization is emerging as an important technology to secure mobile payments, according to industry experts.
• The bank has offered permission for the process using all types of payment services and methods, including near-field communication (NFC), magnetic secure transmission (MST), in-app payment methods and cloud services.
• In the current financial year alone, the number of credit card transactions at points of sale (PoS) has gone up from 132.32 million in April to 145.85 million in November 2018, according to the latest Reserve Bank of India data. For debit cards, the volume is up from 333.77 million in April to 376.57 million in November. Volumes have increased for other modes of retail transactions, such as mobile wallets or UPI (Unified Payments Interface), as well. 
• Developing nations that are moving to digital payments, especially for the unbanked, need to keep in mind security lessons already learned in other markets, including Europe.

Institutional Architecture for Financial Data Security

Data Security Council of India in association with Ministry of Electronics and Information Technology (MeitY) and Google India have crafted an awareness campaign to promote 'Digital Payment Suraksha' to address the need to educate end users and merchants on security and safety best practices while making digital transactions.

'Digital Payment Suraksha' Campaign has two-pronged approach and mutually complement each other:

1. 'Digital Payment Security Awareness Campaign' will engage communities including individuals (users), micro, and small and medium businesses, traders by making them aware of best practices and do's and don'ts on different payment channels including Debit and Credit Card, Online and Mobile Banking, Mobile Wallets, Unified Payment Interface (UPI) & BHIM, Aadhaar Enabled Payment Systems (AEPS), USSD Payments.
2. 'Digital Payment Security Alliance' facilitating the ecosystem to deliberate on a common agenda focusing on policy, deriving best practices from global success stories.

Tokenization of Card Transactions

• Tokenization is the process of replacing sensitive data with unique identification symbols that retain essential information without compromising on security.
• Tokenization will replace card details with a code, called a “token,” which will be specifically for the card, the token requestor and the device being used to pay.
• Instead of the card’s details, the token will act as the card at point of sale (POS) terminals and quick response (QR) code payment systems. The goal of the process is to improve the safety and security of payments.
• The Reserve Bank of India has allowed tokenization of debit, credit and prepaid card transactions to enhance the safety of the digital payments ecosystem in the country.

However, one of the key questions doing the rounds is: why is this measure being adopted only for card transactions? After all, other forms of cashless transactions such as Netbanking, mobile banking as well as UPI are also growing rapidly. The answer is: because UPI has been designed keeping in mind current technology, while card designs used older technology and need an additional layer of security like tokenisation. Similarly, Netbanking also has in-built security features like restricting the daily transaction amount, apart from the multiple factor authentication. Not just that, banks are constantly employing methods to make transactions safer and simpler as well as monitoring transaction patterns. 

Overall, Securing the Digital Payments Infrastructure requires a comprehensive interface alongside evolutionary dynamism to continuously adapt Digital India in the digital world.