Visa made an announcement on March 26th, revealing that its payment services in the Asia-Pacific region have successfully processed over 1 billion tokens and generated a market uplift of more than $2 billion last year.
The Visa Token Service (VST), which was introduced in 2014, acts as a link between traditional banking account information and digital payment services like Google Pay and Apple Pay.
Essentially, the VST replaces the conventional 16-digit credit or debit card number used by consumers to make purchases with a secure numeric token. This allows consumers to share financial information without revealing their private details or banking information.
The VST operates on VisaNet, the company’s own network that can handle over 56,000 transaction messages per second, according to company documentation.
One of the most common use cases for tokenized payment methods is for cross-border payments and international travel. The process of exchanging cash or conducting wire transfers across different currencies often encounters numerous challenges. However, using tokenized assets like cryptocurrencies or payment services such as VST can minimize the difficulties associated with these transactions.
A recent study conducted by Visa discovered that 97% of travelers in the Asia-Pacific region prefer using non-cash payment methods. In 2023, this preference resulted in an average spending of $2,525 per trip.
The “tokenization” of traditional assets into digital currencies and payment facilitators has experienced significant growth following the impact of COVID-19. As travel rebounds and the world recovers from the pandemic, consumers increasingly seek international payment methods with low fees and minimal friction when making 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, the head of merchant sales and acquiring for Asia Pacific at Visa, also encouraged more merchants to adopt tokenized payments, as this technology can directly impact their financial performance.
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