Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members


Card Tokenization is an important and progressive step by RBI. It is the process of converting sensitive card transaction data such as debit/credit card numbers with a surrogate value known as a token. The 16-digit debit/credit card number is replaced with a cryptic set of letters and numbers for security purposes.

While the adoption of digital payments has been growing exponentially over the past few years owing to progressive and enabling policies, products, and platforms by the RBI and government, there is also a need to continuously evolve the security and product controls to ensure that frauds remain under control. One such initiative has been the introduction of tokenization by the RBI. This is expected to help control financial frauds and would go a long way towards enhancing the security and safety of card-based transactions, thereby increasing consumers’ confidence in digital payments.

Following RBI’s guidelines, PhonePe is currently among the top digital payment players driving tokenization under its Safecard Tokenization solution. We started creating tokens in December 2021 and began processing token-based transactions as early as April 2022. PhonePe was the first in the payments ecosystem to provision tokens with all the three major card networks – Visa, Mastercard, and RuPay. We currently process all eligible transactions through tokens, making PhonePe one of the market leaders in processing token transactions. Currently, over 85% of PhonePe’s active users have already tokenized their cards as per RBI’s Card Tokenization mandate. With multiple nudges to consumers over the past few months, PhonePe has seen over 1.6 Crore (16 Mn) debit and credit cards tokenized on its platform. Moreover, the success rate of transactions processed via tokens on PhonePe has shown an improvement of ~2% in comparison with card-based transactions.

Safecard Tokenization will enable PhonePe merchant partners to create, process, delete and modify tokens for online card payments with customers’ consent on their own platforms via a simple Application programming interface (API) integration. This will save significant time and effort for the PhonePe’s merchant partners on the platform as it removes the need to integrate with multiple card networks, while also fully complying with the RBI guidelines. As for customers, over 41.5 crore (415 Mn) registered users can now tokenize their cards just once and enjoy seamless usage without having to enter their 16-digit debit/credit card number for every transaction on the PhonePe App. The customer’s card details are saved only by the issuer banks and card networks, thus minimizing the risk of data leakage and transaction fraud.

While card tokenization is currently not mandatory and a customer can choose to tokenize their debit/credit cards, PhonePe SafeCard provides an added layer of security without impacting the customer experience at all. PhonePe is actively working with its large base of online businesses to adopt PhonePe SafeCard for safer transactions which translates to consumer confidence in using cards on online platforms, thereby helping merchants witness growth in overall transactions.


Deep Agrawal, Head of Payments at PhonePe



Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members