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 more than $2 billion last year.
Launched in 2014, Visa Token Service (VST) serves as a link between traditional banking account information and digital payment platforms like Google Pay and Apple Pay.
Essentially, VST replaces the conventional 16-digit credit/debit card number used by consumers for 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, which can handle 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. Dealing with cash or conducting wire transfers across different currencies involves various challenges. By using tokenized assets like cryptocurrency or tokenized payment services such as VST, much of the hassle associated with these transactions can be avoided.
A recent study by Visa revealed that 97% of travelers in the Asia-Pacific region prefer to make non-cash payments. This led to an average expenditure 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 rebounds and the world recovers, consumers increasingly prioritize international payment methods with low fees and minimal friction when making their purchases.
TR Ramachandran, Visa’s head of products and solutions for the Asia-Pacific region, stated in a press release that tokens “pave the way for the future of commerce.”
Previn Pillay, head of merchant sales and acquiring for Asia Pacific at Visa, further encouraged more merchants to adopt tokenized payments, as this technology can directly impact their revenue and profitability.
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