Visa made an announcement on March 26th revealing that its payment services in the Asia-Pacific region have surpassed 1 billion tokens, resulting in a market boost of over $2 billion last year.
Launched in 2014, Visa Token Service (VST) acts as a link between traditional banking account information and digital payment services like Google Pay and Apple Pay.
In essence, VST replaces the conventional 16-digit credit/debit card number with a secure numeric token when consumers make purchases. This allows consumers to share financial information without exposing their private details or banking information.
VST operates on VisaNet, the company’s exclusive network, which is capable of handling more than 56,000 transaction messages per second, according to company documentation.
One of the most common use cases for tokenized payment methods is for cross-border payments and international travel. The process of exchanging cash or conducting wire transfers across different currencies involves numerous difficulties. By utilizing tokenized assets like cryptocurrency or tokenized payment services such as VST, many of these transactional challenges can be avoided.
A recent study conducted by Visa discovered that 97% of travelers in the Asia-Pacific region prefer to make payments through means other than cash. As a result, in 2023, they spent an average of $2,525 per trip.
The “tokenization” of traditional assets into digital currencies and payment facilitators has experienced significant growth in the aftermath of the COVID-19 pandemic. As travel rebounds and the world recovers, consumers are increasingly emphasizing the importance of low-fee and frictionless international payment methods when deciding where and how to make 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 encouraged more merchants to adopt tokenized payments, highlighting the direct impact this technology can have on their business’s financial performance.
Related:
Visa and Mastercard may play a crucial role in driving cryptocurrency adoption in the coming year.