December 4, 2023

Business Visa

The Business Visa Is Mightier Than Sword

Tokenisation success in India to accelerate digital payments adoption: Visa

India is poised to gain significantly from the proliferation of tokenisation and in turn adoption of digital payments, Joe Cunningham, SVP, Head of Risk, Asia Pacific, Visa has said.

Visa, the first network to provide CoF tokenisation services in India since late 2021, ahead of the RBI deadline, has now issued over 200 million Card-on-File (CoF) tokens, Cunningham told businessline during his India visit few days back.

Visa has issued over 4 billion tokens globally till August 2022, underscoring the powerful security that tokens provide to merchants, issuers and consumers alike.

“India is among the few countries that have implemented tokenisation at this scale and speed in the world. The acceleration and the rate of deployment of tokens are probably unique in India in terms of the speed at which they’ve been adopted. India ecosystem is well placed to benefit from tokenisation”, he said.

Put simply, Card tokenisation is a process of substituting sensitive customer data (such as card number, CVV etc) with an algorithmically generated token (encrypted) by a token service provider, which could be the card issuer of payment network.

Card-on-File tokenisation provides two key benefits —consumer and ecosystem security and an enhanced checkout experience. These tokens flow through the payments systems in a secured way without disclosing the customer details or allowing the payment intermediaries (merchants, payment aggregators) to store customer data.

Globally, Visa tokens have led to a 28 per cent reduction in fraud rates. Approval rates have seen a 3 per cent increase i.e. more sales for merchants while saving them money on fraud-related expenses.

Tokenisation will further integrate into digital commerce to unlock positive and smooth payment experiences while maintaining the integrity and safety of cardholder data across entities, Cunningham said. World over, Visa has seen the payment success rate improve when transactions are tokenised.

“We will continue to be guided by the RBI and our client partners as we continue to innovate in payments and security. We’re trying to ensure that the benefits of tokens are enjoyed by all our clients by merchants that are adopting them to protect, their credentials on file”, he said.

“RBI has played an enormous role in the dynamics of payment system in India. We think RBI steps have accelerated the adoption of valuable Tokens”.

He also said that the authorisation rates are better for tokenised transactions versus non-tokenised transactions.

“Tokenisation can be foundational for the next wave of authentication”, Cunningham said.


Cunningham highlighted that Artificial Intelligence (AI) and Machine Learning (ML) capabilities are becoming entry level criteria now for people who work in high data concentration. “You can’t compete, innovate or operate without having strong AI/ML capabilities. Our investments are significant in AI/ML. Over last five years, we have invested about $9 billion 8n cyber and AI skills”, he said.

AI and ML provide intelligent inputs to banks and networks in fraud detection and prevention with newer Risk-Based Authentication solutions carrying the ability to potentially eliminate second-factor authentications such as PINs and CVV among others, he added.

Asked if the AI models developed by Visa are one step ahead of the fraudsters, Cunningham replied in the negative. 

“I don’t think so. We are facing just like many other organisations more sophisticated attacks than ever. We can say definitively that we are one of the highest degree of maturity world over on AI as assessed independently. 

Security is job number one for everybody in Visa. We do take it incredibly seriously. Our AI is mature and we are one of the most sophisticated users of advanced models. As for fraudsters, We are here talking about State actors and well funded criminal gangs and not individual fraudsters that we have to deal with”, he said, adding that the landscape is getting more complex.