Visa made an announcement on March 26th stating that its payment services in the Asia-Pacific region have successfully processed over 1 billion tokens, resulting in a market uplift of over $2 billion last year.
The Visa Token Service (VST), which was launched in 2014, acts as a link between traditional banking account information and digital payment services like Google Pay and Apple Pay.
Essentially, VST replaces the conventional 16-digit credit/debit card number that consumers use to make purchases with a secure numeric token. This enables consumers to share their financial information without revealing their private details or banking information.
VST operates on VisaNet, the company’s exclusive network that has the capacity to handle more than 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. The process of exchanging cash or conducting wire transfers across different currencies often comes with numerous obstacles. By utilizing tokenized assets like cryptocurrency or tokenized payment services like VST, much of the hassle associated with these transactions can be avoided.
A recent study conducted by Visa revealed that 97% of travelers to the Asia-Pacific region prefer to make payments using methods other than cash. As a result, the average spend per trip in 2023 reached $2,525.
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 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, head of merchant sales and acquiring for Asia Pacific at Visa, added that the company encourages more merchants to adopt tokenized payments as this technology can directly impact their financial performance.
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