Global payment solutions provider Visa is reaching out to banks and merchants to introduce tokenization of payments which features data privacy and personalized shopping.
“Visa is working closely to support everyone in the ecosystem to introduce & grow this technology in the Philippine market so our payments ecosystem can see the same benefits of tokenization as some of the other markets have witnessed,” Visa head for Product and Solutions for Southeast Asia Poojyata Khattar said in an email interview with the DAILY TRIBUNE.
She said tokens which are digital and artificial intelligence-powered data tools provide several benefits to consumers.
First, tokens allow users to make transactions without having to manually input their payment credentials every single time.
Second, tokens replace sensitive cardholder information, as the technology disables the sharing of consumers’ data with merchants and banks without the former’s consent expressed on the bank’s mobile app.
Third, if the consumer agrees to share his or her data with merchants, the former can receive recommendations on other products they can buy online.
Lastly, she said tokens shared with banks allow their clients to easily review the merchants or other companies that obtained their data.
While Visa has distributed 1 billion tokens across the Asia Pacific, Khattar said the Philippines has yet to catch up on adopting the technology towards safer and more personalized online shopping.
The Visa official shared that it has been developing token features for a decade.
“Tokenization is still in the initial stages of adoption in the Philippines. Growing digital penetration especially among the younger generation will drive a greater demand for a more seamless and secure payment experience,” she said.
Tokens are now being used through Apple Pay and Google Pay.
To increase the usage of tokens, Khattar said Visa is aggressively conducting literacy activities for all stakeholders.
“We also have to consider the different levels of readiness across our different partners — including banks/fintechs who issue our cards, as well as merchants and their acquirers — as it truly is an ecosystem effort,” she said.
Visa added it is urging businesses to upgrade their technologies so they can thrive amid the growing e-commerce industry which is always threatened by cybercrimes.
“Aside from the growing demand for improved payment experience, a necessary factor to drive the adoption of tokenization is updating existing legacy systems with new payment infrastructure that supports tokenization — software and devices to support next-generation digital technologies,” Khattar 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.