Incidents of credit card fraud in the Philippines have reached a record low, global payments technology company Visa said Thursday, due to the introduction of “tokenization” technology, which converts cardholders’ sensitive data into a token to make payments more secure.
At a media roundtable in Pasay City, Visa head of risk for Southeast Asia Louis Smith said they introduced tokenization solutions in 2016 in a bid to reduce payment fraud.
Smith explained that tokenization solutions “devalue” a cardholder’s sensitive data, such as the 16-digit credit card number, as this converts data into a single-use “token” that serves as a proxy or substitute for real transaction data, thereby making it useless for hackers.
Driven by the tokenization of data and the shift towards digital payments from traditional brick-and-mortar transactions, Smith said, “In the Philippines… card fraud is at a record low… and consistently coming down.”
“In the last two to three years… fraud numbers [have been] really, really low and well-controlled,” he said.
“Tokenization plays a big factor in securing transactions,” he added.
Globally, Smith said that following the introduction of tokenization solutions, Visa saw a 28% reduction in fraud cases and a 3% uptick in the number of transactions getting approved. — VBL, GMA Integrated News