Visa & Thales: growing eCommerce revenues with tokens in Latin America

Optimizing digital commerce with agile and resilient payment infrastructure.

Thales is one of the world’s leading technology service and solution providers, aimed at enabling digital transformation across a multitude of sectors. Thales’s presence in Latin America is extensive, supporting payments strategies for customers such as Santander, Banco do Brasil and Bradesco. 

Thales is a longstanding Visa partner, collaborating on digital payments since 2012. In 2016,

Thales broadened its strategy to include tokenization, with live implementations in over 50 markets. Both companies are committed to bringing tokenization technology to the Latin American market to help unlock the eCommerce opportunities for merchants and banks.

Combating rising levels of fraud in Latin America

Latin America is already a significant eCommerce market and, with 351 million potential online shoppers active in the region by 2024, there’s an enormous opportunity for merchants to grow and scale⁴. As sales volumes increase, efforts to reduce fraud have resulted in a rise in false declines, legitimate transactions declined by issuers. In Brazil, the average online purchase decline rate is 5%⁵. This is 240 basis points above the global average of 2.6%, which means Brazilian merchants are missing out on potential sales and revenue⁶. This challenge is not unique to Brazil and affects the wider Latin American region. Network tokens present an opportunity to improve authorization rates by enabling the protection and sharing of payment data between merchants, acquirers, networks and, most importantly, issuers. Thales sought to deploy network tokens with the goal of uplifting authorizations by 1% for its merchants. 

Working closely with Thales and its customers 

Building on a longstanding collaboration, Visa worked closely with Thales on a go-to-market plan to integrate network tokens which took into account the complexities of the market and readiness of issuers.

Thales ramped up its token portfolio quickly without impacting the customer shopping experience. The token migration was seamless, driving immediate benefits for merchants through higher approval rates. This is because Visa network tokens both replace sensitive customer data, and incorporate richer user data, such as device information, to help issuers confidently approve transactions.

In just six months Visa and Thales helped its Brazilian merchant customers tokenize 16% of their card on file portfolios and is actively expanding their reach in Brazil and beyond⁷. 
 

Increasing revenues & enhancing the customer experience 

Visa's network tokens have already exceeded Thales’s expectations. Thales had an initial target of 1% minimum authorization uplift, and, to achieve this, Visa and Thales worked closely with both merchants and issuers in Brazil. While results may vary, an average increase in payment authorization of 2.2%* can be expected across the portfolio².

Confidence is at the heart of this jump in authorization rates. With tokens, financial institutions receive richer data (like device information) that enables better decisioning and benefits from proactive credentials updates. Keeping tokens up to date limits false declines due to out-of-date credentials by proactively updating details. Globally, 35% of consumers admit to not updating credentials when they receive a new card. With 67% of Brazilian consumers having at least one subscription payment per card, merchants risk losing revenue if details are not updated⁸. Ensuring credentials are up to date has the potential to recapture over $1.3bn in lost revenue annually in Latin America from out-of-date credentials, helping merchants secure the growing ecommerce opportunity in Latin America³.

Visa and Thales believe tokenization is key to enabling the full potential of digital commerce in Latin America and globally. It also lays the foundation for additional innovation. Thales is already on its way to realizing this potential by deploying Visa network tokens with a clear roadmap to continue building upon this success. Plans are underway to utilize Visa's Cloud Token Framework in Latin America, a solution that enhances digital payments security by recognizing a user across multiple connected devices and helps reduce friction at checkout.