Tokenisation Boosts Payment Security, Cuts Fraud In Asia Pacific Markets
KUALA LUMPUR, July 3 (Bernama) -- The growing adoption of contactless transactions, especially in Asia Pacific, has enhanced payment security with tokenisation technology extending the same level of protection to digital, card-not-present environments.
Visa’s regional risk officer for Asia Pacific, Stefaan D’Hoore, said the tokenisation replaces a card number with a unique token that only works on a specific device and with a specific merchant, making the data essentially useless outside that context and greatly reducing its value to fraudsters.
He also noted that tokenisation brings several additional benefits, such as enhancing the quality of information shared during the payment process. This improvement helps boost payment authorisation rates.
“So you get fewer unwanted declines when making an online payment. And at the same time, we’ve seen a significant reduction in payment fraud,” he said during a media briefing today.
Tokenisation is a non-mathematical approach that replaces sensitive data with non-sensitive substitutes, without altering the type or length of the data.
Furthermore, D’Hoore stated that Visa strongly believes tokenisation is a critical component in strengthening payment security.
“And we’re working, you know, with our partners, with our clients to continue and drive adoption of tokenisation. But great progress, but still more promise,” he said.
D’Hoore noted that merchants who adopt tokenisation typically experience up to a five per cent increase in authorisation rates, resulting in a smoother consumer experience, alongside a noticeable reduction in fraud cases.
He said the company remains highly focused on expanding the adoption of tokenisation technology across its network, which also paves the way for further innovation in other products it is bringing to market.
“It’s kind of like a cornerstone of that, or kind of a foundational element for further innovation as well. And so last year, we passed the one billion mark just in Asia-Pacific in the number of tokens that are now embedded in different devices and across merchant websites,” he said.
D’Hoore said over the last few years, there have been data breaches in Malaysia, including the loss of customer information.
He highlighted that Visa is constantly working with its issuing clients in Malaysia and the region to develop solutions that protect the payment ecosystem and build trust with consumers.
D’Hoore added that Visa continues to invest in strengthening the operational and cyber resilience of its core network, VisaNet, and over the past five years, the company have invested US$10 billion (US$1 = RM4.23) in technology to secure and enhance its VisaNet operations, along with US$3 billion specifically in artificial intelligence.
-- BERNAMA
