Visa made an announcement on March 26th stating that its payment services in the Asia-Pacific region have surpassed 1 billion tokens, resulting in a market increase of over $2 billion last year.
The Visa Token Service (VST), which was introduced in 2014, acts as a link between traditional banking account details and digital payment platforms like Google Pay and Apple Pay.
Essentially, VST replaces the conventional 16-digit credit/debit card number that consumers use for purchases with a secure numerical token. This allows consumers to share 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 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. Converting cash or conducting wire transfers across different currencies can be complicated. However, by using tokenized assets like cryptocurrency or tokenized payment services like VST, many of the issues associated with these transactions can be avoided.
According to a recent study conducted by Visa, 97% of travelers in the Asia-Pacific region prefer to make payments using methods other than cash. This led to an average spending of $2,525 per trip in 2023.
The “tokenization” of traditional assets into digital currencies and payment platforms has experienced significant growth following the COVID-19 pandemic. As travel begins to recover worldwide, consumers are increasingly emphasizing the importance of low-cost and frictionless international payment methods when making their 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, Visa’s head of merchant sales and acquiring for Asia Pacific, also encouraged more merchants to adopt tokenized payments, as this technology can directly impact their financial performance.
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