Payments Testing - March 19, 2024
“The metaverse could present exciting new opportunities for companies willing to reimagine the customer experience in a completely new environment. It offers the potential for co-creation with consumers, leading to even deeper relationships with customers everywhere. However, with challenges like accessibility, data privacy and security, it's still very early and could take years to realize its full potential.”
That’s according to the latest 2023 Commerce and Payment Trends Report from Global Payments, which found one in six businesses are currently planning to set up a presence for their business in the metaverse in 2023.
But what is the metaverse and what does it mean for retail payments? We explore those questions here.
What Exactly is the Metaverse?
The metaverse isn't actually a new concept. The term was initially coined by Neal Stephenson in his 1992 science fiction novel, 'Snow Crash,' where humans - as avatars - interact with each other and software agents in a virtual world. The novel itself is rather dark and dystopian, with the metaverse described there bearing little resemblance to what we see emerging today.
In its current iteration the metaverse is a virtual reality space where users can interact with each other and a computer-generated environment in real-time. It's essentially a collective virtual shared space, created by the convergence of physical and virtual reality. This unification, virtually boundless, includes augmented reality (AR), virtual reality (VR) and the internet.
The metaverse is used for a variety of purposes. It's primarily a space for social interaction, where users can meet, communicate, and participate in activities together in a virtual environment. It's also used for entertainment purposes, with immersive gaming experiences being a key draw.
The metaverse is more than just an advanced gaming environment. It's a novel commercial sphere that opens up a multitude of opportunities for businesses to engage new and existing customer segments. In fact, many businesses are already leveraging the metaverse.
“The metaverse is the next place people are going to interact and connect,” said Konrad Chan, President of Asia Pacific at Global Payments. He described what social experiences could look like.
“Let's say you walk into a clothing store and you want to try something on. Your avatar can actually put it on and ask your friends what they think. Then you go to the cashier to make the purchase, completing the experience with human interaction. These 3D experiences, combining virtual and physical, are unlike ecommerce today.”
Nike, for example, recently launched a partnership with Roblox, a centralized metaverse and online multiplayer gaming platform to create a virtual world called Nikeland. In its first four months of operation, Nikeland attracted 7 million people.
What Does the Metaverse Mean for Retail Payments?
While there seems to be general agreement that the metaverse can only be successful if there is/are fast, safe and convenient ways to pay for goods and services. However, there is still some debate about what this actually means, as demonstrated by these three recent essays:
It must be noted that in the physical world there are currently a wide variety of payment options available for consumers to choose at their discretion, e.g. cash, credit cards, debit cards, digital wallets, peer-to-peer payments, ACH, cryptocurrencies, yes, even good old checks.
So it is highly unlikely that we will see the metaverse evolve into a one-way-to-pay platform (at least not in the foreseeable future). Rather, it is much more probable that multiple payment options will exist to suit the particular needs of a diverse and sophisticated user community.
While the metaverse presents some very interesting opportunities for both business and consumers, there is a long way to go before we see a ubiquitous and interoperable payment system that can seamlessly facilitate payment transactions across multiple physical and virtual worlds.
The rise of the metaverse is likely to be interesting, exciting and entertaining, but it will certainly bring a lot of change. It’s important to put your organization in position to take advantage of the opportunities that the metaverse will offer by ensuring that you have the right payment testing technology and tools in place.
Want to learn more about what the metaverse means for the payments industry or how Paragon can help you enhance your payments testing environment? Request a consultation with our team today.
