Visa made an announcement on March 26th regarding the success of its payment services in the Asia-Pacific region. These services have processed over 1 billion tokens, contributing to a market uplift of more than $2 billion last year.
The Visa Token Service (VST), which was launched in 2014, plays a crucial role in connecting traditional banking account information with digital payment platforms like Google Pay and Apple Pay.
In essence, VST replaces the conventional 16-digit credit or debit card numbers used by consumers with secure numeric tokens. 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 over 56,000 transaction messages per second, according to company 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 often leads to various challenges. However, by utilizing tokenized assets like cryptocurrencies or tokenized payment services such as VST, many of these transactional hurdles can be avoided.
A recent study conducted by Visa revealed that 97% of travelers in the Asia-Pacific region prefer non-cash payment options. In 2023, this preference resulted in an average expenditure of $2,525 per trip.
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 continues to rebound and the world recovers, consumers increasingly prioritize international payment methods with low fees and minimal obstacles when making purchases.
TR Ramachandran, Visa’s head of products and solutions for the Asia-Pacific region, emphasized in a press release that tokens are paving the way for the future of commerce. Previn Pillay, the head of merchant sales and acquiring for Asia Pacific at Visa, also encouraged more merchants to adopt tokenized payments, as this technology can have a direct impact on 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.