Let’s start from the top. What is the metaverse?
Simply put, the metaverse is an online 3D virtual realm where you can own land, buy art, play games, and attend digital conferences and concerts using augmented reality glasses.
You’ve likely heard about ‘The Sims’ before. If you’ve not, it’s a game where you’re able to create a whole world of houses, people, communities, and even go to work and create virtual relationships. The metaverse is pretty much like that, but with real humans behind their digital avatars!
Now imagine that you have a chance to create your own avatar, a virtual persona designed and fully controlled by YOU. How would you build it? Would it be a replica of how you are in real life? Or would it be an “upgraded” version of yourself, or maybe a completely different one?
However you or others choose to build their avatar, any individual that’s fully immersed into the metaverse will still have the same needs as those we have in day to day life – and need a way to pay for those things. So, how will that play out in a virtual world?
Well, Bloomberg has estimated that by 2024 the metaverse market may reach 783.3 billion US, compared to 478.7 billion USD in 2020. This represents a compound annual growth rate of 13.1%. Sounds appealing for online and metaverse savvy businesses, right?
Payments in the Metaverse
Now that we all understand the concept of the metaverse, let’s discuss payments within it. There has been a lot of discussion about how payments will work, with a lot of arguments leading to blockchain paving the way for meta transactions. Cryptocurrency payments are a natural fit for the metaverse. This is because they offer many advantages over traditional payment methods, which users can utilize to purchase goods and services.
As businesses and individuals flock to the metaverse, new payment mechanisms are being developed to accommodate the needs of this growing community. One of the key benefits of digital currency payments in the metaverse is that they are borderless. This means that users can send and receive payments from anywhere in the world, without having to worry about exchange rates or hefty currency conversions.
Other online platforms are also making headway in this space. Twitter, for example, has become one of the first platforms planning to let creators share their NFTs and connect crypto wallets. NFT, or Non-Fungible Tokens, are tokens that represent a unique item, with blockchain records that store information about the digital file. This will allow creators to create and grow an online community- a perfect example of the idea behind the metaverse. A lot of these discussions are tied to decentralized finances. Traditional money is rarely brought into the conversation.
The metaverse is still developing however, and there are several challenges for merchants to reach and understand this new world. When it comes to payments, issues in regards to data privacy and payment fraud can be a worry. Also, customer behavior and shopping preferences may represent a big adaptation challenge for some organizations.
Visa’s report, for example, has evidenced that typical metaverse platforms are used by young people. Zepeto has 80% of its users considered teenagers, while 54% of Roblox users are less than 13 years old! So, the Gen Z audience is an important one. All companies involved with the metaverse that will need to process payments, will need to choose options that are popular among the new generation.
Will this new and exciting world change the way payments are made? How will merchants know which payment methods their customers want to create a seamless user experience? These are all questions we ask ourselves. The mystery of the metaverse will soon come to light as we adapt to the endless opportunities the future of technology presents.
There are many opinions surrounding the metaverse, but whether you are a skeptic or not, there are certain psychological aspects that need to be considered. The mental health concern behind a new online world isn’t something new. This has been around for many years. There has been a rising concern in mainly teenagers, who strive for a picture perfect online image. Truth is, the metaverse will massively contribute to this.
Research has shown that within the complexity that comprises the metaverse, users are creating virtual personas that are flawless, compensating for real-world insecurities. This begs the question; is our reality that bad that it makes you want to escape it?
The metaverse brings all this to surface. People are raising questions in regards to how virtual reality will affect mental health, inducing addiction, anxiety, and depression. The sedentary lifestyle also has a huge impact on physical health. This can contribute to hindering proper blood circulation, due to lack of movement, and causing obesity and heart problems.
The increase of dopamine levels in the brain is associated with how immersive the experience gets. You, as a user, might become obsessed and eventually stuck in the metaverse, in your fantasy. A place where your sensory experiences are amplified. Would you ever want to leave and where do you draw the line?
As humans, it is normal to pick situations apart that we are unfamiliar with. The idea of a whole new virtual world can be daunting to many of us. However, the concern for mental health can be a positive as well! This can bring awareness and encourage healthy habits within the metaverse. Time management and discipline to understand your own personal limits will be necessary. We hold the power to use the metaverse as a safe space to encourage positive mental and physical health, while still enjoying all it has to offer.
So, how do you feel the metaverse will affect the payments landscape? What impact do you feel it’ll have on the general public? As a merchant, how will catering to a virtual world change how you function? Reach out to us and let us know!