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RBI

RBI Extends Tokenization Demand For Credit And Debit Cards By 6 Months, Providing Relief To Online Shoppers.

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According to new Reserve Bank of India guidelines, e-commerce companies like Amazon and Flipkart, as well as online delivery aggregators like Zomato, will not be able to save card information on their platforms starting July 1, 2022. (RBI). Beginning next year, customers conducting online transactions on any e-commerce platform will be required to enter their debit or credit card information each time. Customers can, however, avoid the hassle by giving platforms permission to tokenize their cards.
To improve security, the RBI issued guidelines in March 2020 that prohibited merchants from saving customers’ card details. The regulatory body updated its guidelines on card tokenization services in September of this year to improve safety and security. The Reserve Bank of India (RBI) on Thursday extended the deadline for card tokenization until June 30, 2022, in response to repeated requests from industry stakeholders. Tokenization is the process of replacing credit and debit card information with an alternate code known as a “token.”

Because the card details are not shared with the merchant during transaction processing, tokenized cards are considered safe for online transactions. “The deadline for storing card on file (CoF) data has been extended by six months, to June 30, 2022,” the central bank said in a notice to all payment system operators, adding that all such data will be purged after the extended deadline expires.
The RBI had previously set a deadline of December 31, 2021, as the end date. Reserve Bank of India (RBI) had previously been requested by the Indian Banks Association (IBA) to extend the deadline for tokenizing. The main reason for the request for a delay in the tokenization deadline was that many small and medium-sized businesses lack the infrastructure to transition to the new system, even though banks are more or less prepared.

RBI
Image source: indianexpress.com

Tokenisation is the process of replacing credit and debit card information with an alternate code known as a “token.” Each card, token requestor, and device has its own token. The entity that accepts a customer’s request for tokenization of a card and forwards it to the card network for issuance of a corresponding token is known as the token requestor.

The cardholder can have his or her card tokenized by submitting a request through the token requestor’s app. Token requestors send their requests to the card networks, which issue tokens with the approval of the card issuer that correspond to the particular card, token requestor, and device.

So, what does this imply for a loyal customer? The following are ten key points to remember:

  1. Customers will be unable to save their debit or credit card information on any e-commerce platform beginning July 1, 2022.
  2. Every time a customer conducts an online transaction, they will be required to re-enter their card details.
  3. Customers can give e-commerce companies permission to “tokenize” their cards in order to avoid the hassle. E-commerce platforms will ask the card network to encrypt details with additional factor authentication if necessary after receiving a customer’s consent.
  4. Customers can save their cards for future transactions once the e-commerce platform receives the encrypted details.
  5. Most major e-commerce platforms can only tokenize Mastercard and Visa-issued cards for the time being. Other financial services cards are expected to be tokenized in the near future.
  6. For both credit and debit cards, the new RBI guidelines must be followed.
  7. International transactions are exempt from the new guidelines. The new RBI guidelines are only applicable to domestic cards and transactions.
  8. Customers will not be charged an additional fee for card tokenization.
  9. On e-commerce platforms, tokenized cards will be identified by the last four digits as well as the issuing bank and network name.
  10. Finally, card tokenization is not required. Customers can choose to tokenize their cards for faster transactions or enter their card information manually.

Michael Aldrich inventor of online shopping

Michael Aldrich : A Connoisseur in the Entrepreneurial World and the Founder of Online Shopping

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In the biggest success stories of start-ups of that, we hear from around the world today would have not come into existence today, if online shopping did not exist. From the prospering online shopping sites, like eBay, Amazon, Flipkart, to the very small newly started e-commerce sites should be grateful of the English entrepreneur who came up with the idea of online transactions. That great innovator is none other than Michael Aldrich, who developed e-commerce from scratch in the late 1970s. With an experience of 28 years in the IT sector, he worked for reputed companies before inventing teleshopping (today known as online shopping).

Early Life

Born into a family living in Hertfordshire, England, on 22nd August 1941, Aldrich did his schooling from Clapham College, London. He was a very bright student and even received a scholarship to study history at the University of Hull in 1959. During his time there, he met Sandy Kay Hutchings and got married to her just before completing his graduation. So, Aldrich already established a family before starting his career.

Many say that getting committed and entering into married life at a very young age can create difficulties and stops you from giving your best. But, in this case, it’s diametrically opposite.

Beginning of Aldrich’s Career

Michael Aldrich inventor of online shopping
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Aldrich worked for Honeywell and Burroughs in the sales and marketing department of the company for almost 15 years. After that, he joined Redifon Computers, which was a part of the UK Rediffusion Group of Companies. The Rediffusion Group manufactured televisions as well as computers, but Aldrich worked for the department of computer manufacturing.

This is when the journey of the invention of online shopping (he named it teleshopping) began.

The Story

One day in the year of 1979, UK Rediffusion Group sent a colour television to Aldrich’s office, but he didn’t pay much attention to it, as his main concern revolved around selling computers. This television came with a new service called Prestel, a paid commercial service that would be delivered through a telephone line.

Seeing no interest of Aldrich in that television one of the engineers in his company, Peter Champion, decided to learn more about this new TV, and its new feature. After studying about the TV for a few weeks, he told Aldrich that the television came with an auto-dialer that could hold four telephone numbers. He gave Aldrich the idea of building such a controller for a computer, and then, connecting the television. Aldrich noticed his point, but he didn’t give it much of thought at that time.

After a few days, when Aldrich was complaining about the weekly tour to grocery shops, the idea of Peter hit him hard. This was when he thought of connecting the television to the supermarket itself and get the groceries delivered to home. Without wasting a single second, Aldrich started working on this idea.

After days of research and writing papers, finally, a prototype TV to test this real-time transaction process was connected to one of their computers, and the test was successful. There wasn’t any year of research going on to support this idea of teleshopping, and hence, it seemed like a sudden scientific mutation took place in the communication world.

Once it was developed, Aldrich needed to set up a market and build up demand as the entire world wasn’t aware of how to use this new system.

After Reality Hit Hard

Aldrich found himself in a total mess, as he invented a product, but there wasn’t a market to sell it. So, after the invention, he tried reaching out to people for real feedback and everything was done in sheer privacy as their product wasn’t officially launched.

He went to a conference in New Orleans, kept it low and received positive feedback from the people. Returning back to the UK, the company designed the multi-port controller, built the computer interface software, and finally, launched it on April 1980. The entire world was amused by the idea of shopping from home, but no one was actually able to interpret how it worked. So, Aldrich hosted a press conference, and again, launched the product in July 1980.

Marketing Strategy

After launching the product, the idea was very clear to Aldrich that he would sell this to big corporations so that he could connect the agents, customers and distributors directly to the system without the involvement of a third party. He divided the market into leaders and followers and approached the leaders with this product. This business idea was later known as business to business online shopping (B2B).

The company had almost no competition, so it flourished for the next ten years after its launch.

After the great invention

In 1984 Aldrich became a fellow of the British Computer Society, and a Chartered Fellow in 2004. He was also awarded an honorary degree of Doctorate of Letters by the University of Brighton in 2004. In 1987 he was made a Freeman of the City of London, England. Aldrich became the Chairman of Tavistock Institute of Human Relations in 1989. In 2010, University of Brighton named an award after his name, which is given to the talented students excelling in e-commerce.

Aldrich died on 19th May 2014.

Instacart

Apoorva Mehta : The Founder of Instacart, the ‘Uber of Grocery’

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The internet and the rise of the tech giants like Google, Microsoft and Amazon have inspired a lot of people out there to start their own innovative business. And there is much evidence that the inspiration has worked for numerous people. The Internet has helped people to get idea from their daily needs and transform it into a successfully functioning business. One such person, who was inspired by the success of the big tech companies, is Apoorva Mehta, the founder of Instacart. Mehta was awed by the fact that how the new startups were getting success overnight. And hence, after trying out over 20 business ideas, he finally started Instacart.

Early Life and Career

Mehta belongs to the Indian descent, but was born and brought up in Canada. He had always been inclined towards the internet and technology. He had also been interested in learning science and computer programming. After completing his school education, Mehta joined the University of Waterloo, to complete an electrical engineering degree.

After completing his graduation, Mehta worked for companies like Qualcomm and BlackBerry. Though he had got good jobs, he was a bit confused about what he really wanted to do. Later, in 2008, Mehta moved to Seattle, to work with Amazon. He joined Amazon as the supply chain engineer. But, here too, he could not feel the passion for work and left the company after two years, in 2010.

The Inspiration for Startup

Apoorva Mehta Instacart
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With the rise of the tech companies, he had already developed an interest in entrepreneurship, so Mehta started looking for ‘the’ idea, that would help him establish a successful business. It took him over two years and 20 failed startup ideas to finally reach to Instacart. Before Instacart, Mehta tried to build an ad network for the gaming com to developing a social network for lawyers. But nothing worked for him.

After brainstorming for two long years and testing out those twenty startup ideas, Apoorva Mehta stopped and analysed, what he was doing wrong. He even thought of quitting, as none of his ideas had worked out. But persistence is the key. This time, he decided to work with passion and patience. He also realized that a business is successful when it solves a problem. So, he started looking for a problem that he could solve. Ultimately, he got an idea of developing an online grocery delivery service, which came out straight from his own pain point.

While working at Amazon, Apoorva Mehta was unable to find time to go for grocery shopping. He could order anything online, but there were no grocery delivering services. He found an opportunity in the problem and started working to solve it.

Finding the Investors

Mehta developed the app for his new startup ‘Instacart’ and started looking for investors. He tried to get into the Y Combinator tech incubator 2012, but the summer intake was already closed. So he had to take the other way around. He met a few of the partners of Y Combinator to request them to provide him entry into the incubator. But no one agreed. He met the last partner, who did not reject him, but said that the startup idea was nearly impossible.

Apoorva Mehta came back empty-handed but sent a pack of beer to that last partner through his app. This act made that partner think of this idea again, and he convinced the other Y Combinator partners to open the entry for Mehta. And this way, the doors of success were also opened for Mehta and his startup. Finally, he launched the company in 2012, in San Francisco.

The Rise of Instacart

In two years from its inception, the company gained a $40 million and spread to 17 different locations within the U.S. and Canada. The company was named as the ‘Most Promising Company in America’ by Forbes in 2015, and even, valued at $2 billion just in three years.

In 2016, the company went to expand in the North Chicago Zone, and the next year, the company was serving in 1,200 cities in 25 states. By the end of the year, the company partnered with Loblaw Companies for deliveries. The company raised a total of $400 million investment and valued at $3.4 billion.

In 2018, Instacart partnered with companies like Walmart Canada, HyVee, The Fresh Market, Harps, Lunds & Byerlys. It even acquired a Canada-based grocer named Unata. After raising a $200 investment in February 2018, the company raised another $600 million funding in October the same year and valued at $7.6 billion.

Mehta’s startup idea was unique and became successful within a year of its inception. And today, it is among the unicorn companies. The reason behind the success of Instacart is that it was different from the other businesses. It won’t be wrong if we call Instacart the Uber of grocery, as there was no warehouse to store the grocery and no official vans were bought to do the deliveries. In fact, the grocery came directly from the retailers, and the company hired people with their vehicles to do the deliveries. Both Instacart and the retailer are in benefit, and there is no spending of money on the physical cost resources.

After Apple Amazon Also Joins the $1 Trillion Club

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amazon
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It is quite difficult to believe that once a non-profit online bookstore, that was founded in a small garage, has hit the $1 trillion mark in business, after 21 years. Jeff Bezos, the founder of Amazon, is one of the biggest beneficiaries of Amazon’s growth and under his leadership, Amazon has become the second tech company that has hit the $1 trillion valuations.

Noticeably, Amazon valued $600 billion in January 2018, and in just 165 days of trading, it has joined the 1 trillion club, as the second member, just after Apple. In the past, Jeff Bezos has done a few massive investments that have led Amazon to reach this position. In the beginning, Amazon was an online bookstore but now it has its hand in various other fields too.

Amazon has excelled in AI and has acquired a pharmaceutical store PillPack for $1 billion. It has revolutionised the way of shopping and its retail unit has added a lot of revenue to its growth. The main contributing industry that has helped Amazon to achieve the $1 trillion mark is AWS. The Amazon Web Services has been contributing as of 65% to the company’s growth, providing a $25 billion in revenue annually. Also, its fastest-growing ad business has generated $2 billion in quarterly sales recently.

No wonder that Amazon has become the number one retailer in the US that captures nearly half of all U.S. dollars spent online. Some analysts have even mentioned that soon Amazon can overtake Apple if it keeps growing at such pace.