Visa made an announcement on March 26th stating that their payment services in the Asia-Pacific region have successfully processed over 1 billion tokens, resulting in a market uplift 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. Essentially, VST replaces the conventional 16-digit credit/debit card number used by consumers 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 capacity to handle over 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 often comes with numerous friction points. However, by utilizing tokenized assets such as cryptocurrency or tokenized payment services like VST, many of these transactional difficulties can be avoided.
A recent study conducted by Visa revealed that 97% of travelers in the Asia-Pacific region prefer to make payments using methods other than cash. In 2023, this preference resulted in an average spend 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 continues to rebound worldwide, 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, emphasized in a press release that tokens are leading 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, highlighting the direct impact this technology can have on their financial performance.
Related:
Visa and Mastercard could play a crucial role in driving the adoption of cryptocurrencies in the coming year.