Payment giant Visa Inc has announced that its tokens have surpassed the number of physical cards in circulation. The company has issued more than 4 billion network tokens worldwide through its Visa Token Service (VTS).
The VTS replaces the 16-digit account number with a token that can be unlocked only by Visa. This method provides protection against fraudsters by securing the underlying information.
“Tokenization is a simple, yet powerful concept pioneered by Visa: conceal and devalue sensitive payment data to stay ahead of fraudsters and make digital payments more secure,” said Jack Forestell, executive vice president and chief product officer at Visa in a press release.
Forestell added that the increase in the use of Visa tokens by consumers and merchants “reinforces that the future of money is truly digital, and digital money must be built on trust.”
Visa launched the VTS in 2014 and issued 1 billion tokens by 2020. The number of tokens issued hit the 2 billion mark in 2021 and doubled this year. Now, with the 4 billionth token issued, Visa tokens have overtaken physical Visa cards currently in circulation, according to news agency Reuters.
“This milestone is indicative of the continued investment Visa is making in safe, reliable and seamless transactions around the globe. Continued adoption of tokenization will help enable Visa’s mission of helping individuals, businesses and economies thrive,” said Forestell.
The pandemic has led to an increase in the e-commerce volume, which has grown by more than 50%. This surge in online shopping has led to a demand for simple and safe transaction methods. By replacing the Visa account number, the tokens provide a convenient and more secure way to carry out transactions.
An analysis by Visa has shown that the Visa token has reduced fraud rates by 28% and has led to a 3% increase in approval rates across over 8,600 issuers and 8,00,000 merchants. This, in turn, increased the sales of merchants while also safeguarding them against fraudsters, as per the press release.