“Without exposing the consumer’s account to fraud, tokenization enables frictionless, card-free payments,” Jack Forestell, chief product officer at Visa, said in an interview with Reuters.
VTS replaces 16-digit Visa account numbers with a token that can only be unlocked by Visa, thus safeguarding the underlying account information.
Read more: Visa Says Tokenized Transactions Set To Hit $1T, Sets Click-to-Pay Transition
Visa launched VTS in 2014 and issued 1 billion tokens by 2020. From there, growth accelerated to 2 billion in 2021 before doubling this year.
The Reuters report noted that the popularity of the service coincides with the rise in online spending since the global outbreak of COVID-19.
Visa says eCommerce volume has climbed by more than 50% since the pandemic began, citing figures from the U.S. Department of Commerce.
Related: U.S. Consumers Made $1.7T in Pandemic eCommerce Purchases
PYMNTS reported earlier this year that American consumers spent $1.7 trillion online from March 2020 to February 2022, citing figures from the Adobe Summit.
The two-year total is almost $610 billion more than all eCommerce spending from March 2018 through February 2020, Adobe said, projecting that online spending in the U.S. would top $1 trillion for the first time this year.
In 2021, 41.8% of overall eCommerce spending throughout the U.S. came from grocery, electronics and apparel purchases.
Groceries represented 8.9% of the overall eCommerce spending at $79.2 billion in 2021, compared to $73.7 billion in 2020, which was more than double the level of online grocery spending in 2019. Adobe expects that number to exceed $85 billion for 2022.
