Visa made an announcement on March 26th stating that its 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.
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.
Essentially, VST replaces the conventional 16-digit credit or 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 can handle over 56,000 transaction messages per second, as documented by the company.
One of the most common use cases for tokenized payment methods is for cross-border payments and international travel. Exchanging cash or conducting wire transfers across different currencies can be complicated. However, the use of tokenized assets such as cryptocurrency or tokenized payment services like VST can simplify these transactions.
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. As a result, the average spend per trip in 2023 reached $2,525.
The tokenization of traditional assets into digital currencies and payment facilitators has experienced significant growth following the COVID-19 pandemic. As travel rebounds and the world recovers, consumers are increasingly seeking international payment methods with 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, also encouraged more merchants to embrace tokenized payments, emphasizing that this technology can directly impact their financial performance.
Related: Visa and Mastercard could play a crucial role in driving the adoption of cryptocurrencies in the coming year.