Visa announced on March 26 that its payment services in the Asia-Pacific region have served more than one billion tokens while bringing an “uplift” to the market of more than $2 billion last year.
Visa Token Service (VST), launched in 2014, serves as a bridge between traditional banking account information and digital payment services such as Google Pay and Apple Pay.
Essentially, VST replaces the traditional 16-digit credit/debit card number used by consumers to make purchases with a secure numeric token. This allows consumers to share financial information without exposing their private details or banking information.
VST operates on VisaNet, the company’s proprietary network that, according to company documentation, is capable of handling more than 56,000 transaction messages a second.
One of the more common use cases for tokenized payment methods is for cross border payments and international travel. Exchanging cash or conducting wire transfers across currency types comes with myriad friction points. The use of tokenized assets such as cryptocurrency or tokenized payment services such as VST can avoid much of the hassle involved in these transactions.
A recent study by Visa found that 97% of travellers to the Asia-Pacific region prefer to make payments by means other than cash. In 2023 this led to an average spend of $2,525 per trip.
The “tokenization” of traditional assets into digital currencies and payment facilitators has grown significantly in the wake of COVID-19. As travel continues to flourish in the post-pandemic world, the need for international payment methods with low fees and friction has become increasingly cited by consumers as driving factors in how and where they make purchases.
Visa’s head of products and solutions for the Asia-Pacific region, TR Ramachandran, said in a press release that tokens “pave the way for the future of commerce.”
“The innovation possibilities are immense with tokenised payment credentials that can unlock new and more personalised consumer experiences beyond physical Visa cards. We continue to build on the capabilities that modern credentials offer, together with our partners, to bring more value to the entire payment ecosystem.”
Previn Pillay, Head of Merchant Sales & Acquiring, Asia Pacific, Visa added that the company encourages “more merchants to adopt tokenised payments as this technology can make a direct impact to their top and bottom lines.”
Related: Visa, Mastercard could be key drivers for crypto in the year ahead
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