The Visa Token Service (VTS) replaces conventional 16-digit Visa account numbers with a token that only Visa can unlock. VTS is compatible with Apple Pay and Google Pay, and it represents a payments security platform that provides different solutions for banks, clearing houses, and retail consumers.
The Visa Token Service was launched in 2014, and according to Visa, it had issued 1 billion tokens by 2020. In the following years, the number of issued tokens doubled, reaching 2 billion in 2021 and 4 billion in 2022.
According to Visa officials cited by reuters.com, the solution ensures frictionless, card-free payments and protects the underlying account information without exposing the consumer’s account to fraud. They also emphasised that customers pay online even when they shop in physical stores since a smartphone can have the same functionality as a Visa card.
Citing data from the U.S. Department of Commerce, Visa officials stated that E-commerce volume has grown by more than 50% since the onset of the COVID-19 pandemic. Along with the promise of safer transactions, this uptake in online spending has influenced the popularity of the tokenisation service.
In order to make it easier for merchants, payment facilitators, and payment gateways to get started with network tokenisation, US-based data privacy vault company Skyflow has expanded its collaboration with Visa in August 2022.
The partnership builds on Skyflow’s existing collaboration with Visa, including participation in Visa Fintech Partner Connect, which helps connect Visa’s clients to fintech providers. According to Visa, network tokens can help minimise card-not-present fraud and can help keep card-on-file information updated, which ultimately improves customer experience.
According to tokenex.com, the main goals of credit card tokenisation are to improve security and reduce risk. By replacing sensitive cardholder data with an irreversible token, tokenisation effectively removes sensitive data from a cardholder data environment. Since tokens are considered non-sensitive data, they can be stored and used for internal business purposes without bringing the system that stores them into scope.
The same source reveals that reducing controls and removing sensitive data from scope can be just as valuable as improving security and risk reduction. These tokenisation services, including Visa’s own solution, can securely transfer credit card data without sacrificing compliance or business utility.
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