Visa made an announcement on March 26th stating that their payment services in the Asia-Pacific region have successfully utilized over 1 billion tokens, resulting in a market uplift of over $2 billion last year.
Introduced in 2014, Visa Token Service (VST) acts as a connection between traditional bank 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 to make purchases with a secure numeric token. This enables consumers to share financial information without revealing their personal details or banking information.
VST operates on VisaNet, the company’s exclusive network that, according to company documentation, can handle more than 56,000 transaction messages per second.
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 involves numerous challenges. The use of tokenized assets like cryptocurrency or tokenized payment services such as VST can simplify and streamline these transactions.
A recent study conducted by Visa found that 97% of travelers in the Asia-Pacific region prefer to make payments using methods other than cash. 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 COVID-19. As global travel rebounds from the pandemic, consumers increasingly prioritize international payment methods with minimal fees and friction when making their 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, Visa’s head of merchant sales and acquiring for Asia Pacific, added that the company encourages more merchants to adopt tokenized payments as this technology can directly impact their financial performance.
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Visa and Mastercard are expected to play a significant role in driving the adoption of cryptocurrencies in the coming year.