Visa said its token service has been a boon for the Asia-Pacific region’s digital economy.
The region saw an “uplift” of more than $2 billion last year due to Visa token service (VTS) adoption, the company announced in a Tuesday (March 26) press release.
“VTS replaces the 16-digit debit or credit card number with a unique identifier called a token that only Visa can unlock,” the company said in the release. “Visa tokens secure the payment credential, enabling the transfer of enhanced data, which can help to improve payment success rates and lower fraud rates. These benefits, coupled with ease of use across devices, lead to an improved consumer experience.”
Tokens can also enhance payment processing by allowing for more control and enriching data exchange for each transaction, thus preventing legitimate transactions from being declined by payment systems, according to the release.
“Consumers and businesses alike expect payments to be secure and seamless, and network tokens are the enabler,” said Previn Pillay, head of merchant sales and acquiring, Asia Pacific, Visa, in the release. “With the authorization uplift and lowered fraud rates, merchants can focus more of their valuable time and resources on product innovation and customer engagement.”
As PYMNTS wrote earlier this month, tokenization allows merchants to provide secure and automated checkout.
“The tokens themselves can be used across all parties in a transaction chain and are interoperable,” the report said. “Vault providers … help ensure that the cards are updated with regularity, skirting the pain points that interrupt transactions when cards expire or need to be replaced.”
PYMNTS Intelligence found that more than two-thirds of consumers said a streamlined checkout experience is “very or extremely influential” in determining whether they will patronize a merchant again.
Nearly all respondents said that the knowledge that their account data is stored securely helps foster a satisfactory checkout experience.
PYMNTS Intelligence from the report “Combating Online Fraud With Digital Identification” found that 83% of consumers said they considered security “highly important,” while 53% said consistent experiences across platforms — which are made possible via the interoperable nature of the tokens — affect trust in financial institutions.
Meanwhile, Visa’s earnings showed that tokenized credentials grew 6% in the most recent quarter, and the company has issued 8.7 billion network tokens issued, with the number of acceptance locations increasing by 17%.
Over at rival Mastercard, CEO Michael Miebach said on that company’s most recent earnings call that tokenization has cut down on fraud and has increased approval rates in the range of 3 to 6 percentage points.
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