Dubbed ‘the future of the Internet’, it is no surprise that this year has seen big tech companies and financial institutions eyeing a slice of the metaverse pie. It is still early days in the development of the metaverse, so the possibilities it could bring for businesses looking to drive sales is largely untapped, but optimism about its potential is widespread. While some industry players see the metaverse being characterised by virtual reality (VR) or augmented reality (AR), others envision a new digital economy in cyberspace where users can create, buy, and sell goods – all facilitated by integrated payments.
If this vision can become a reality, the metaverse might well be the next mainstream channel for commerce. Just like retailers focus on a blend of e-commerce, physical retail, and social commerce – the metaverse could very much be the missing piece in the puzzle when it comes to optimising a truly multichannel commerce experience in the future. Here’s how.
Laying solid foundations
To really develop the metaverse and realise its full potential, investment in infrastructure is key. While businesses are pumping funds into developing AR and VR capabilities such as Alibaba’s USD 60-million investment into Nreal to fund AR glasses and Oculus’ new VR set series to further enhance the virtual user experience, the same attention is not being put on back-end payments. It’s all very well creating an amazing visual experience – but if it cannot be leveraged to drive real business growth and increase revenue, efforts and investment might well be fruitless. That’s why investment in payment infrastructure in the metaverse should be one of the first things a business thinks about when playing in the metaverse space.
New complexities in the digital payments space
Source: Patrick Tomasso/ Unsplash
Once payment infrastructure is in place, there’s still more to do. As the digital economy transforms and the metaverse becomes the next evolution of an omnichannel shopping experience, it will attract more mainstream users. Crypto will not necessarily be the only popular payment option in the metaverse, in wider society consumers utilise e-wallets of all kinds, along with credit and debit transactions and even Buy Now Pay Later (BNPL).
As a new era of payments evolves, the risk of cyber-attacks and fraud should remain at the forefront of both merchants’ and consumers’ minds. As always, the more data that is available, the more there is a greater risk to privacy. These challenges signal the need for companies to enforce tighter verification standards such as Know Your Business (KYB) and Know Your Customer (KYC) during the merchant onboarding process.
However, there are two sides to every coin, and the wealth of data available in the metaverse can also be used as a force for good. For example, it can enhance and optimise user experience, predict trends, and alert companies to risks or potential threats.
To unlock the full potential of the metaverse, organisations and businesses need to invest in solid infrastructure and partner with relevant experts, and this includes integrating a payments infrastructure. After all, if the full potential of the metaverse is to be realised, it is crucial that consumers can access a seamless experience and payments are an integral part of this. If businesses can do this successfully, the metaverse becomes a powerful tool to engage with consumers both online, and offline, in a completely new way.
One business that has been a frontrunner in doing this is Meta. Meta has ambitious plans to let metaverse users pay for digital items, retain the proof of item ownership and manage their identities through its newly rebranded Meta Pay. In this way, the metaverse can be monetised, fuelled by the continued expansion of digital wallet capabilities to work in different realms, like the way digital payments work today.
The familiarity of experience obtained from the 2D screens of our laptops and phones will change forever with the invention of the metaverse, as we are engaged in 3D spatial settings for the first time – something that is bound to open endless marketing opportunities for brands – as well as opportunities to drive and convert sales through payments infrastructure. If we look at the metaverse in this way, each digital environment within it has the potential to have its own digital economy, with integrated payments, creating a fully-functioning metaspace.
A combined effort
The journey towards making the metaverse the next must-have channel in the consumer retail experience calls for a collaborative effort between regulators and industry players. Regulators need to keep abreast of developments in the metaverse and consult with industry players continuously. As it is still in the early stages of development, where the metaverse might take us, and the opportunities it might present are still to be determined.
However, in the meantime, industry leaders and innovators should consider ramping up the scale of their investments in the metaverse, strive to build curiosity amongst consumers, and sustain momentum until the time comes for transiting into the metaverse.
Author: An Lu, Head of Market Development, Asia Pacific, PPRO