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Tokenized payments shielded businesses from $650m fraud in 2023 — Visa

Tokenised payments shielded businesses from $650m fraud in 2023 — Visa

Visa has announced that its tokens, through its tokenization technology, prevented businesses from losing $650 million to fraud in the last year. It also stated that its token generated over $40 billion in incremental e-commerce revenue for businesses globally.

The global firm noted that it has issued more than 10 billion tokens since the technology’s launch in 2014. In a statement on Thursday, it said, “Over the last 10 years, Visa has enhanced security across the payment ecosystem through tokenization – a technology that replaces sensitive personal data with a cryptographic key that conceals sensitive payment data.

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“Tokenization can be embedded into any device, making digital payments more secure while being virtually useless to scammers. Currently, 29 percent of all transactions processed by Visa use tokens, reflecting their widespread adoption and the trust consumers place in this secure payment method.”

According to the firm, the tokenization technology has also caused a six-basis point increase in payment approval rates globally. Overall, tokenization can reduce the fraud rate by up to 60 percent, providing businesses with more successful transactions and offering much-needed peace of mind to consumers and merchants of all sizes.

“Today’s milestone represents the impact that tokenization has had on the entire payments ecosystem since we introduced the technology 10 years ago,” said Jack Forestell, chief product officer at Visa.

The product officer explained that tokens have changed the game by securing online payments and paving the way for more innovations.

A recent Visa survey revealed that less than one-third of consumers globally feel in control of their data and that only slightly more than one-third fully understand how their data is used. However, the firm believes that tokenization can unlock a whole new era of personalisation and security—one where consumers control their data and approve when and where it can be shared for a more personalised experience.

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Globally, fraud cases have been on the rise, especially because of the boom of electronic payments. In the last five years in Nigeria, over N59 billion has been lost to fraud. Over 80,000 Nigerian bank customers were defrauded in 2023, highlighting the severity of the problem.