Global payment solutions provider Visa said Asia-Pacific could see exponential economic growth through tokenization of payments.

In a report released Thursday, Visa said Asia-Pacific already posted higher economic growth by over $2 billion last year using tokenized payments.

Tokenization converts credit or debit card numbers into unique, digital identification called tokens which can be exchanged between merchants and financial firms easily but safely.

Consumers’ data will be shared by Visa only if the consumers have provided consent.

Visa said fraud rates in payments dropped by 58 percent last year due to tokenized payments.

As tokens also carry information on specific recipients of payments, tokenization enables product recommendations to consumers.

Secure, seamless payments

“Consumers and businesses alike expect payments to be secure and seamless and network tokens are the enabler. With the authorization uplift and lowered fraud rates, merchants can focus more of their valuable time and resources on product innovation and customer engagement,” Visa head of merchant sales and acquiring for Asia-Pacific Previn Pillay said.

Visa has distributed 1 billion tokens across the region.

However, Visa head for product and solutions for Southeast Asia Poojyata Khattar said the Philippines have yet to adopt tokens massively.

She said Visa is conducting tokenization literacy activities for Philippine merchants and financial firms to spread the use of the technology.

“Tokens pave the way for the future of commerce. We continue to build on the capabilities that modern credentials offer, together with our partners, to bring more value to the entire payment ecosystem,” Visa head for products and solutions TR Ramachandran said.

The Department of Trade and Industry said e-commerce in the country expanded by 58 percent to $7.5 billion from 2019 to 2020.

By 2030, it said growth could reach P14.3 trillion or $285 billion which is equivalent to 26 percent of gross domestic product.