Indian consumers, especially the millennial demography, have become credit-savvier over the years, thus indulging in credit tools more than ever. Further, recent trends also indicate that there is a higher propensity among users in upgrading to premium cards, as opposed to holding on to basic credit cards.
Consistent with this surge, credit card fraud has also witnessed a sharp rise due to various security loopholes. The first quarter of 2020 solely reported of as many as 45,120 such cases.
While types of credit card fraud can be diverse, one of the most concerning aspects is that physical possession of a card is not needed for such frauds to concur. Scammers can purport these frauds easily through copying or skimming of card details, stealth installation of malicious app on a device, or through a data breach. In this backdrop, Token has surfaced as a potential security layer for credit card fraud prevention.
What is Token?
Token is a free app generating virtual credit card numbers. Its increasing use indicates that there will be lesser instances of using the physical card for swipes, which cuts down the chances of credit card fraud.
While the nomenclature of the app is ‘Token’, tokenisation is an already existing process of secured transmission of data even though a virtual card number is submitted by a cardholder. This process has been adopted by popular mobile payment systems, which can help in preventing credit card fraud in India to a remarkable extent.
However, even with chip-equipped credit cards, their online use may not be entirely safe. Some credit card providers offer the generation of a virtual credit card number, but the process may not be as simple as the one provided under this app.
Another reason for Token to be gaining popularity is that it does not require one to carry the credit card physically.
Nevertheless, it is known that one of the primary examples of credit card frauds is by way of theft or use of a lost card. If such an incident has taken place, one may opt for Wallet Care plan provided by Bajaj Finserv under its Pocket Insurance & Subscriptions for coverage against financial damages sustained by a cardholder.
While such coverage options extend the umbrella of benefits in case of a breach or compromise, knowing about the process of using the Token app can serve suitably for every card user.
How to use the Token app?
Using the token app is fairly simple, which starts right from linking your existing credit card with the app. Subsequently, a virtual credit card number, known as a ‘token’ is generated. It thus adds a layer of security, eliminating the need to share one’s card credentials.
A new token can be generated for any online purchase or order placed through a phone. One of the key features of Token is that it remains active until it is frozen or deleted.
Given that apart from credit card fraud, other forms of cybercrime have also witnessed a steep rise, a cyber security cover in place will help in covering an individual from financial losses resulting from phishing or cyberattacks.
Other pertinent things to look for
While the Token app may go a long way in protecting credit card users from fraud, there are certain aspects that users should take note of beforehand.
While setting up an account in the app, a user has to submit personal information apart from the account number or credit card number. It is advised to first review the terms and conditions and privacy policy of the app before agreeing to its use.
Further, you can also consider opting for an identity assure plan for financial or other losses incurred due to identity theft.
While apps like Token are well-appreciated in adding a layer of security to financial transactions, they are not immune from cyber frauds. It is thus best to keep a suitable insurance cover in place to keep your finances protected in case of a breach.
