Visa has recently declared that its payment services in the Asia-Pacific area have successfully processed over 1 billion tokens, resulting in a market uplift of over $2 billion last year. The Visa Token Service (VST), introduced in 2014, acts as a link between traditional banking account information and digital payment platforms like Google Pay and Apple Pay.
In essence, 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 their financial information without compromising their personal details or banking data. VST operates on VisaNet, the company’s exclusive network that has the capacity to handle more than 56,000 transaction messages every second.
One of the common applications for tokenized payment methods is for cross-border payments and international travel. The process of exchanging cash or conducting wire transfers across different currencies can be cumbersome. The use of tokenized assets, such as cryptocurrencies, or tokenized payment services like VST, can significantly simplify these transactions.
A recent study carried out by Visa revealed that 97% of travelers in the Asia-Pacific region prefer to make payments through means other than cash. This preference resulted in an average expenditure of $2,525 per trip in 2023.
The “tokenization” of traditional assets into digital currencies and payment facilitators has experienced substantial growth in the aftermath of the COVID-19 pandemic. As travel continues to rebound and the world recovers, consumers increasingly emphasize the importance of international payment methods with low fees and minimal friction when deciding where and how to make purchases.
TR Ramachandran, Visa’s head of products and solutions for the Asia-Pacific region, stated 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, further encouraged more merchants to adopt tokenized payments, highlighting that this technology can directly impact their financial performance.
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Visa and Mastercard are expected to play crucial roles in driving the adoption of cryptocurrencies in the coming year.