Visa Tokenisation Report Forecasts Six Digital Payment Trends in India

11/16/2023

Key Highlights:

  • Underscores the rapid progress India has made, issuing over 560 million tokens in a year.
  • The progress in tokenisation, backed by regulator and payment ecosystem collaboration, signals a secure and connected digital future for India.
  • Visa’s 300 million tokens is a substantial portion of its over 7.5 billion tokens issued globally1 and has led to card authorisation rates rising by 4.5%2 since the introduction of tokenisation.
     

Mumbai, November 16th 2023 – Visa, the global leader in digital payments, unveiled a comprehensive report detailing how tokenisation is driving India's digital economy. The report, "Enabling the Digital Shift: Tokenisation in India’s Economic Landscape", marks one year since the effective date of the RBI’s mandate on tokenization for ecommerce transactions. It underscores the rapid progress India has made, issuing over 560 million tokens within a year3, including 300 million tokens issued by Visa. This is a substantial portion of its over 7.5 billion tokens issued globally, and leading to card authorisation rates rising by 4.5% since the introduction of tokenisation.

The report provides a comprehensive view of India’s tokenisation journey, considering the perspectives of key stakeholders such as merchants, issuers, and payment processor and identifies six future trends on account of India’s tokenisation success:

  1. Simplified Payments: Tokenisation will make payments much easier including through voice assistants and smart devices that employ augmented and virtual reality.
  2. Revolutionising Commerce: Issuing digital cards will be faster, subscription-based services simpler, and even change the retail experience with grab-and-go stores.
  3. Faster Token Provisioning: Simplified ways of tokenisation will make the process of moving tokens (digital representation of card information) between the card issuer and destination wallets and website faster and easier
  4. Frictionless Authentication: Tokenisation can be combined with biometric authentication (like fingerprint or facial recognition) to reduce card-related fraud.
  5. Improved B2B Payments: Thanks to tokens, businesses can streamline reconciliation, issue unlimited virtual cards and set transaction spending limits to mitigate risks
  6. Contextual Commerce: By combining tokenisation with social media, users can enjoy a seamless shopping experience right within their favorite platforms.

Shri Vasudevan P, Executive Director, RBI, while commenting on the report, said, “The Visa report provides valuable insights into the transformative role of tokenisation in India's digital payments landscape. As the country pushes towards a digital economy with an increasing volume of transactions, tokenisation has immense potential to further digitise the payment ecosystem. We appreciate the efforts of all ecosystem players, including Visa, in championing tokenisation and highlighting its benefits. With a substantial 560M tokens already in circulation and a fast-paced growth rate, we foresee tokenisation becoming a pivotal force in the evolution of digital payments.”

Sandeep Ghosh, Group Country Manager for India & South Asia at Visa, commented, "The RBI’s visionary policies and supportive regulatory framework have positioned India as a global leader in digital payments. This has catalysed the rapid growth of digital payments and the seamless implementation of innovations like tokenisation. We, at Visa, are proud to have issued over 300M tokens in India and by embracing innovations such as biometric authentication, contactless payments, and integrated commerce solutions, we aim to enhance customer experiences, reduce fraud, and drive the expansion of digital payments."

Insights gathered from an industry survey conducted as part of the report forecast:

  • Lower data breach risk, fewer frauds, and easier compliance for the industry
  • Better security, increased trust in digital payments, and improved payment experiences for consumers
  • Mobile based contactless payments and payments through wearables emerged as top use cases
  • 94% of respondents anticipate reduced data breaches while 88% expect enhanced consumer security going forward
  • 76% predict a rise in contactless payments across devices and merchant categories

As India marches towards a $1 trillion digital economy by 20304, the rise in cyberattacks from 0.2 million in 2018 to 1.3 million in 20225, necessitates growth, sustainability, and robust consumer protection. The progress in tokenisation, backed by regulator and payment ecosystem collaboration, signals a secure and connected digital future for India.

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1 Visa Q4 FY23 Earnings
2 Enabling the Digital Shift: Tokenisation in India’s Economic Landscape
3 RBI Press Release
4 https://www.bain.com/about/media-center/press-releases/2023/indias-internet-economy-to-reach-us$1-trillion-by-2030-google-temasek-and-bain--company-report/
5 E-Conomy 2023

 

About Visa
Visa (NYSE: V) is a world leader in digital payments, facilitating transactions between consumers, merchants, financial institutions and government entities across more than 200 countries and territories. Our mission is to connect the world through the most innovative, convenient, reliable and secure payments network, enabling individuals, businesses and economies to thrive. We believe that economies that include everyone everywhere, uplift everyone everywhere and see access as foundational to the future of money movement. Learn more at Visa.com.