Ranchi, Jharkhand | June | 23, 2022 :: Last year, the Reserve Bank of India (RBI) proposed payment guidelines with regards to Card-On-File (CoF) data and the shift to tokenization. While the RBI extended the deadline to 30th June 2022, it still overlooks executional challenges which could potentially disrupt the digital economy at large.
To discuss the issues associated with its implementation, the Atal Bihari Vajpayee Centre for Leadership, Policy, and Governance (ABVCLPG), a multidisciplinary think-tank of the Indian Institute of Management (IIM) Ranchi, conducted a roundtable discussion and essay competition titled, “RBI’s payment guidelines on tokenization and its impact on ‘digital adoption,” in collaboration with Empower India. Dr. Pradip Kumar Bala, Director-in-charge of IIM Ranchi graced the occasion and spoke about the institute and Centre of Excellence-Atal Bihari Vajpayee Centre for Leadership, Policy and Governance.
The session was moderated by Prof. Aditya Shankar Mishra and Prof. Angshuman Hazarika with Dr. Aruna Sharma, retired IAS, Former Secretary, Govt. of India, as the key speaker. This was also followed by the announcement of winners of the competition. Ms. Sanjana Santhosh of Christ University, Bangalore was awarded the first prize followed by Ms. Adhishree Trivedy of IIM Nagpur and Mr. Alistair S.H. Toppo of IIM Indore as the first and second runners up respectively.
Speaking at the roundtable discussion, Dr. Aruna Sharma highlighted that the industry is still not ready to implement the tokenization framework. “Unlike the e-mandate, whose disruption was limited to few players in the ecosystem, tokenization is going to disrupt around 100 crore debit and credit cards,” she said. She also stated that the RBI has given a deadline and cemented its intention on tokenization, but not shown any interest in handholding smaller merchants to help adopt this mechanism. “Merchants are left to deal with this change themselves and are in dire need of an extension, along with some handholding to help sustain business.” Additionally, speaking on the impact of tokenisation on the ecosystem, Dr. Sharma expressed, “Ideally, the transition needs at least a year for players to comply with it. There will be a heavy burden on banks, affecting the speed of transactions. The RBI should assess the level of readiness of all stakeholders who are part of the value chain. Until the backend is ready, e-commerce platforms are equipped, and smaller merchants are included in the process, India’s mission to become a digital economy would be incomplete.”
Some other key highlights that came up in the discussion are as follows:
? The implementation date of 1st of July 2022 is not ideal in any given scenario. Six months were given to accelerate the process but there is a need for another 1-year extension.
? There is a need to address the grievance redressal speed and refund mechanism, as the likelihood of digital transaction failure is quite high.
? Customer comfort and satisfaction need to be prioritized to ensure that they do not shift from digital transactions.
? The RBI should acknowledge the volume and speed of transactions and establish a mechanism for individuals who do not want to opt for tokenization before the implementation of the guidelines.
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