The immense popularity of Metaverse needs no special mention. Find out how payments and digital commerce will evolve to meet the growing needs of this new digital frontier.
Touted by many as the “next internet”—Metaverse as a concept has been raking in a lot of attention.
All this talk of how Metaverse provides an augmented reality that could very well surpass the physical reality that we live in seems straight out of a Christopher Nolan movie.
While this is not a foreign concept for gamers (who are used to living life by a proxy), for the rest of us—knowing what Metaverse is all about is crucial, especially at a time when it is attracting the big tech firms of today.
Metaverse came into the limelight after Mark Zuckerberg’s announcement about rebranding Facebook as Meta. The term Metaverse is used to describe a parallel online world where users can create avatars to represent themselves and interact with one another in a virtual world. It is described as the first web 3.0 application and according to a few experts from the industry, Metaverse could very well be the evolution of the internet as we know it.
While time and again we have seen the uproar about digital worlds and augmented reality die down after a while, Metaverse stands a lasting chance. The promise of a new reality is exciting for many reasons, giving businesses the perfect leeway to make the most of what now seems to be the ‘future of the internet’.
What’s interesting and what I would like to delve into is, how businesses and individuals will accept and transfer money in the Metaverse. As businesses flock to the Metaverse, virtual applications and new payment mechanisms are being developed to meet the growing needs of this community.
To put it simply—we are on the verge of stepping into a fully digital payments landscape, with Metaverse in the picture, we will soon be seeing the much-awaited evolution of digital payments into augmented payment offerings.
Into the Metaverse: A Quick Guide on the Metaverse Payment Rails
The idea of a convergence of the digital and physical realms is exciting no doubt. This explains why social networks, online game makers, and tech leaders are all looking to get a slice of this global phenomenon, which according to Bloomberg Intelligence is projected to be a whopping $800 billion market.
Source: Bloomberg Intelligence
While physical cash is out of the question in the virtual world that Metaverse presents, I see digital currency payments taking over. Blockchain-based digital currencies will be the most common method of payment in this new virtual world.
Digital currencies will be widely used in the Metaverse to pay for goods and services primarily because they are borderless—this means that currency conversion fees and exchange rates will not be a concern for users who are transferring payments from across the world.
In the recent past, we have seen how blockchain technology has the power to scale into all types of digital payments and now it offers an instant and a highly secure way of accepting payment for commerce in the Metaverse.
With no time to wait around for transfers to take place between banks, the Metaverse marketplace creates a level-playing field for digital assets like Non-Fungible Tokens (NFTs), making them a preferred form of payment along with the digital versions of Fiat currencies.
The Metaverse universe is made up of popular cities like ‘The Sandbox’ and ‘Decentraland’. It’s interesting to see how the Metaverse real estate is growing at a fast pace allowing users to buy ‘land’— blockchain-backed virtual tokens, that are nothing but physical spaces in the Metaverse.
While Facebook has placed its bet on this virtual world, by creating a virtual reality environment called Horizon Worlds, they are not the only takers making news.
From the ever-evolving world of financial services, we have the likes of JP Morgan, who became the first bank to step into the Metaverse and open a lounge in Decentraland.
Major card issuers are also following suit. With a series of patent and trademark filings, Mastercard has revealed its plans of moving into Metaverse commerce.
Mastercard has filed 15 trademark applications for
▶️Its Circles Logo
Indicating plans for
✅NFT backed media
✅Payment processing in the Metaverse
✅Marketplaces for digital goods + NFTs
✅E-commerce transactions in the Metaverse#NFT #Metaverse #Web3 pic.twitter.com/IlamOZ6OLZ
— Mike Kondoudis (@KondoudisLaw) April 8, 2022
Metaverse Comes with its Risks
With all this action and hype from the financial services world, we sure can expect Metaverse to be the next big revolution to watch out for.
While Metaverse promises massive potential, there are risks attached to it, as is the case with most of these recent developments.
Businesses need to be wary of the risk of fraud as there are not many security measures to prevent cybercrime like phishing attacks, data theft, and false chargeback on payments, from taking place.
Word of advice: For merchants and users that are looking to step into the world of Metaverse, knowing the different payment options that are available in Web 3.0 applications will help you take the right measures to protect yourselves from fraud and avoid falling into scam traps.
Metaverse is Set to Redefine the Way We Pay
From what we have seen in the past, technology always has its way! As Metaverse continues to evolve and move past the early stages of development, we can all be assured of one thing—the payments ecosystem will surely be redefined to accommodate the needs of the growing Metaverse community.
As commerce takes shape in the Metaverse and payments in the virtual world are still being iterated, there are some huge opportunities to tap into for those of us looking to leverage the new digital frontier.
If you want to stay in the know about the latest from the world of payments, be sure to follow me on LinkedIn.