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Key Takeaways:
Enhanced security: VTS employs tokenisation technology to replace sensitive card information with unique digital identifiers called tokens. These tokens are used for transactions instead of actual card details, significantly reducing the risk of fraud.
Seamless customer experience: Despite the robust security measures, VTS ensures a seamless and frictionless payment experience for customers.
Support for digital innovation: VTS is instrumental in driving digital innovation and advancing the adoption of emerging payment technologies in the Asia-Pacific region. By providing a secure framework for tokenised transactions, VTS facilitates the integration of new payment methods, such as mobile wallets, wearables, and IoT devices, into the payment ecosystem.
Visa Token Service (VTS) has hit a milestone by issuing 1 billion tokens in the Asia-Pacific region.
The Rise of Visa Token Service in Asia-Pacific
On March 26 2024, Visa announced that its payment service aims to uplift the market by more than $2 billion last year. In 2014, Visa Token Service (VST) was launched and bridges traditional banking account information and digital payment services. Essentially, VST places the traditional 16-digit debit/credit card number used by consumers to make purchases with a secure numeric token, allowing them to share financial information without exposing their banking or private details.
In a press release, Visa’s head of products and solutions for the Asia-Pacific region, TR Ramachandran, revealed that tokens pave the way for the future of commerce. Ramachandran said,
“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.”
Driving Secure and Seamless Transactions
The proliferation of digital payments in the Asia-Pacific market has been fuelled by various factors, including rapid technological advancements, changing consumer preferences, and the ongoing shift towards a cashless economy. Amid this evolving landscape, Visa Token Service has emerged as a critical enabler, offering consumers and businesses a secure and seamless payment experience.
At its core, Visa Token Service replaces sensitive payment information like card numbers with unique digital identifiers or “tokens.” These tokens are virtually impossible to counterfeit, providing an additional layer of security against fraud and unauthorised transactions. By leveraging tokenisation technology, Visa ensures that sensitive data remains protected throughout the payment process, instilling consumer confidence and fostering trust in digital transactions.
VTS facilitates frictionless transactions across various channels, including in-store, online, and mobile payments. Whether consumers purchase at brick-and-mortar retailers, shop online, or use mobile wallets, VTS ensures a consistent and secure payment experience across all touchpoints. This versatility is particularly valuable in Asia, where consumers exhibit diverse payment preferences and behaviours. VST operates on the company’s proprietary network, VisaNet. One of the more common use cases for tokenised payment methods is for cross-border payments and international travel. Using tokenised assets like cryptocurrency or tokenised payment services such as VST can avoid the hassle involved in these transactions.
Accelerating Digital Transformation and Financial Inclusion
The milestone achievement of 1 billion tokens served by Visa Token Service reflects the growing demand for digital payment solutions. By enabling secure and convenient digital payments, VTS plays a crucial role in expanding access to financial services and fostering greater inclusion, especially among underserved communities and emerging economies.
Head of merchant sales and acquiring for Asia Pacific at Visa, Previn Pillay, added, “The company encourages more merchants to adopt tokenised payments as this technology can make a direct impact to their top and bottom lines.”
In countries where traditional banking infrastructure may be limited, digital payments offer a lifeline, empowering businesses and individuals to participate in the global economy and unlock new opportunities for growth and prosperity.
Visa’s efforts to scale its tokenisation services align with broader initiatives to promote interoperability and standardisation within the payments ecosystem. By collaborating with financial institutions, merchants, and technology partners, the platform seeks to establish a robust foundation for digital commerce wherein all stakeholders can benefit from enhanced security, efficiency, and innovation.
Looking ahead, Visa remains committed to driving the next wave of digital innovation in the Asia-Pacific region and beyond. Through continued investments in cutting-edge technologies, strategic partnerships, and collaborative initiatives, the payments platform aims to accelerate the adoption of digital payments further, enhance financial inclusion, and provide value to consumers, businesses, and economies.