Visa made an announcement on March 26th, revealing that its payment services in the Asia-Pacific region have reached a milestone of serving over 1 billion tokens. This accomplishment has generated a market uplift of more than $2 billion in the previous year.
The Visa Token Service (VST) was launched in 2014 and acts as a link between traditional banking account information and digital payment services such as Google Pay and Apple Pay. Essentially, VST replaces the conventional 16-digit credit/debit card number with a secure numeric token, allowing consumers to share 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 their documentation.
One of the most common uses for tokenized payment methods is for cross-border payments and international travel. The process of exchanging cash or conducting wire transfers across different currencies often comes with various challenges. However, using tokenized assets like cryptocurrency or tokenized payment services like VST can help avoid many of these difficulties.
According to a recent study conducted by Visa, 97% of travelers in the Asia-Pacific region prefer to make payments using methods other than cash. This has resulted in an average spend of $2,525 per trip in 2023.
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 resumes and the world recovers, consumers are increasingly seeking international payment methods that offer low fees and minimal friction when making purchases.
TR Ramachandran, Visa’s head of products and solutions for the Asia-Pacific region, expressed 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, encouraged more merchants to adopt tokenized payments, emphasizing the direct impact this technology can have on their financial performance.
In related news, Visa and Mastercard are expected to play a crucial role in driving the growth of cryptocurrencies in the coming year.