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.
The Visa Token Service (VST), which was launched in 2014, acts as a link between traditional banking accounts and digital payment services like Google Pay and Apple Pay.
Essentially, VST replaces the conventional 16-digit credit or debit card number with a secure numeric token when consumers make purchases. This allows consumers to share their financial information without disclosing their private details or banking information.
VST operates on VisaNet, the company’s exclusive network that has the capacity to handle more than 56,000 transaction messages per second, as stated in the company’s documentation.
One of the most common applications for tokenized payment methods is for cross-border payments and international travel. Exchanging cash or conducting wire transfers across different currencies can be complex and problematic. By using tokenized assets like cryptocurrency or tokenized payment services such as 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. This resulted in an average spend of $2,525 per trip in 2023.
The “tokenization” of conventional assets into digital currencies and payment facilitators has experienced significant growth in the aftermath of the COVID-19 pandemic. As travel rebounds and continues to thrive, consumers increasingly prioritize international payment methods with low fees and minimal complications when deciding where and how to make their purchases.
TR Ramachandran, Visa’s head of products and solutions for the Asia-Pacific region, expressed in a press release that tokens are laying the groundwork for the future of commerce.
Previn Pillay, head of merchant sales and acquiring for Asia Pacific at Visa, further emphasized the company’s support for more merchants to adopt tokenized payments, as this technology can have a direct impact on their financial performance.
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