Visa disclosed on March 26 that its payment services in the Asia-Pacific region processed over one billion tokens and contributed over two billion dollars to the market “uplift” in the preceding year.
Established in 2014, the Visa Token Service (VST) is an intermediary between conventional banking account data and mobile payment platforms, including Apple Pay and Google Pay.
In essence, VST substitutes a secure numeric token for the conventional 16-digit credit/debit card number that consumers employ to complete transactions. This feature enables individuals to exchange financial data without jeopardizing the confidentiality of their personal or banking information.
VisaNet, the organization’s exclusive network through which VST functions, is reportedly capable of processing over 56,000 transaction messages per second, as stated in company documentation.
Cross-border transactions and international travel constitute a prevalent application of tokenized payment mechanisms. There are numerous friction points to consider when conducting wire transfers or financial exchanges across currency types.
One can significantly reduce the administrative burden of performing these transactions by utilizing tokenized assets or payment services (e.g., VST or cryptocurrency).
According to a recent study by Visa, 97% of travelers to the Asia-Pacific region prefer to make payments via a method other than currency. This resulted in an average expenditure of $2,525 per journey in 2023.
In the aftermath of COVID-19, the “tokenization” of traditional assets into digital currencies and payment facilitators has increased substantially. Consumers have begun to attribute a more significant proportion of their purchasing decisions to the demand for international payment methods characterized by minimal friction and fees as the global travel industry continues to thrive amid the recovery from the pandemic.
In a press release, TR Ramachandran, chief of products and solutions for the Asia-Pacific region at Visa, stated that tokens “pave the way for the future of commerce.”
“The innovation possibilities are immense with tokenised payment credentials that can unlock new and more personalised consumer experiences beyond physical Visa cards. We continue to build on the capabilities that modern credentials offer, together with our partners, to bring more value to the entire payment ecosystem.”
According to Visa’s director of merchant sales and acquiring for Asia Pacific, Previn Pillay, the organization strongly advises “a greater number of merchants to embrace tokenized payments, as doing so can directly influence their financial performance.”
