Visa made an announcement on March 26th that its payment services in the Asia-Pacific region have successfully utilized over 1 billion tokens, resulting in a market uplift of more than $2 billion last year.
The Visa Token Service (VST), which was launched in 2014, acts as a connection between traditional banking account information and digital payment services like Google Pay and Apple Pay.
In essence, VST replaces the traditional 16-digit credit/debit card number that consumers use to make purchases with a secure numeric token. This enables consumers to share their financial information without exposing their private details or banking information.
VST operates on VisaNet, the company’s exclusive network that has the capability to handle over 56,000 transaction messages per second, as stated in company documentation.
One of the most common applications for tokenized payment methods is for cross-border payments and international travel. The process of exchanging cash or conducting wire transfers across different currencies comes with numerous complications. However, by utilizing tokenized assets like cryptocurrency or tokenized payment services such as VST, much of the hassle involved in these transactions can be avoided.
According to a recent study conducted by Visa, 97% of travelers to the Asia-Pacific region prefer to make payments using methods other than cash. This resulted in an average spend of $2,525 per trip in 2023.
The “tokenization” of traditional assets into digital currencies and payment facilitators has significantly increased in the aftermath of the COVID-19 pandemic. As travel resumes and the world recovers, consumers are increasingly seeking international payment methods that offer low fees and minimal complications when making purchases.
TR Ramachandran, Visa’s head of products and solutions for the Asia-Pacific region, stated in a press release that tokens are paving the way for the future of commerce.
Previn Pillay, head of merchant sales and acquiring for Asia Pacific at Visa, also expressed the company’s encouragement for more merchants to adopt tokenized payments, emphasizing that this technology can directly impact their financial performance.
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