Paytm Unveils Industry-First Guest Checkout Solution Based on Alternate IDs

In response to the Reserve Bank of India's (RBI) recent proposal on card-on-file (CoF) tokenisation measures, fintech giant Paytm has introduced the industry's inaugural alternate ID-based guest checkout solution for merchants. This move comes as a significant stride in enhancing user security and streamlining the checkout process.

Tokenisation for Enhanced Security:

Following RBI's CoF tokenisation measures, Paytm's solution employs tokenisation to mask the 16-digit debit or credit card number with a unique token, preventing potential misuse and theft from merchant websites.

This offering, developed by Paytm Payments Services Limited (PPSL), integrates with various card networks, including Mastercard, to generate alternate IDs for transactions.

Eliminating Sensitive Data Storage:

The newly launched solution allows end customers to checkout as guests without saving sensitive card details, addressing security concerns and eliminating data breaches. Paytm emphasizes that customers will enter complete card details for a transaction, creating an alternate ID, a move expected to minimize risks associated with storing sensitive personal data for occasional purchases.

Additional Layer of Security:

Paytm's initiative introduces an additional layer of security by breaking away from the conventional process where a user's card details were passed through various entities in the transaction flow. With the alternate ID solution, this potential vulnerability is mitigated, aligning with RBI's guidelines for a secure transacting experience.

Enhanced Speed and Convenience:

The new service not only bolsters security but also enhances the speed of transactions. By sharing additional information, the checkout process is expedited, reducing the need for users to sign up for an account on the merchant's website.

PPSL's Focus on Compliance:

A spokesperson from PPSL emphasized the company's commitment to compliance and secure payments. "As the first to go live with (an) Alternate ID solution, we continue to innovate and bring merchants the best of 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."

RBI's CoF Tokenisation Feature:

The RBI's CoF tokenisation feature, introduced in October 2022, requires users to save their card details as a token on the merchant platform for identification. Paytm's new offering extends this security feature to guest checkout transactions by allowing users to checkout with an alternate ID, replacing actual card numbers.

Future Implications: With the RBI proposing CoF token creation facilities directly at the issuer bank level, users may soon be able to create tokens on their bank's website or app, enhancing overall security measures in digital transactions.

Relevant and latest facts for the above news:

• More than 56 crore tokens have been created so far and transactions worth INR 5 lakh crore have been processed via these tokens

• Under the current rules, card tokenisation can only be undertaken on a merchant website or app while making payments

• The Reserve Bank of India's (RBI) CoF tokenisation feature masks the 16-digit debit or credit card number with a unique token that is specific to one's card to prevent misuse and theft from merchant websites

• Paytm's new service will add an additional layer of security as until now a user's card details were passed to subsequent entities in the transaction flow to authorize and process the transaction

Conclusion:

Paytm's new alternate ID-based guest checkout solution is a significant development in the Indian fintech industry. It is expected to benefit both merchants and customers by making it more secure and convenient to checkout online.