The payment landscape is undergoing some exciting changes. For example, Visa, known for issuing credit and debit cards, is also issuing network tokens for e-commerce transactions. That new venture has proven very successful as the company has issued over four billion tokens.
Visa Network Tokens Gain Momentum
What makes the issuance of these tokens so intriguing is how there are more network tokens than physical Visa cards. A bit of a surprising development, considering payment cards remain the most convenient way to pay online or offline. The tokens are designed for online e-commerce payments but provide additional convenience and security. A Visa Token Service (VTS) replaces the 16-digit card number with a digital token only Visa can unlock.
Visa started experimenting with VTS in 2014, and it took a while for the concept to gain traction. The COVID-19 pandemic has been very beneficial as consumers started paying more attention to e-commerce. More specifically, e-commerce volumes have increased globally by over 50% since the pandemic began. That has resulted in Visa network tokens issuance doubling in the past year.
Visa EVP and CPO Jack Foestell comments on the trend:
“The uptick in issuers, acquirers, merchants and consumers all transacting with Visa tokens, reinforces that the future of money is truly digital, and digital money must be built on trust.”
Using these network tokens provides extra security to users. The token masks the underpinning account information from fraudsters and other criminals. In addition, VTS has yielded a 28% fraud reduction rate across over 800,00 merchants, confirming the approach works as advertised. It will be interesting to see if Visa will continue to note growth on this front, although the current statistics paint a promising outlook.