9 May 2023
The payments industry is constantly evolving with new emerging technologies, offering exciting opportunities for businesses and customers alike. Over the past few years, the world of digital payments has experienced tremendous growth due to the rising number of online transactions in the arena of innovative technologies like the Metaverse, Virtual Reality (VR), and Augmented Reality (AR). According to a recent report by Statista, the global extended reality (XR) market has already reached $29.26 billion in 2022, with an expected increase to over $100 billion by 2026, signaling a steady rise in demand for XR technologies in the coming years. In this blog post, we'll delve into how the Metaverse, VR, AR, and other frontiers can impact the payments industry.
Metaverse
The concept of the Metaverse has gained a lot of attention in recent years and for a good reason. The Metaverse offers a completely immersive and interconnected virtual world, where users can interact with each other, digital objects, and even make payments. The potential of Metaverse payments is enormous and could revolutionize the way we conduct commerce.
According to research by Accenture, the metaverse is gaining popularity among consumers and businesses as a tool for enhancing daily tasks and as a creator economy. The research indicates that metaverse experiences and commerce could contribute 4.2% of company revenues, totaling $1 trillion, by the end of 2025.
One of the key advantages of Metaverse payments is the seamless and secure transaction process it provides. By allowing users to make payments within a virtual environment, businesses can simplify the payment process and reduce friction for customers. This can lead to increased sales and revenue for businesses that operate in virtual worlds or games.
Moreover, Metaverse payments offer new opportunities for businesses to monetize their virtual offerings. With the rise of creator economies, businesses can leverage Metaverse payments to offer virtual products and services to users. This can include virtual fashion, digital art, and even virtual real estate.
Virtual Reality (VR)
Virtual reality (VR) is another technology that has come a long way in recent years, offering new and exciting opportunities for businesses to engage with customers. VR allows users to immerse themselves in a completely virtual environment, interacting with objects and people in a way that feels almost real. For example, VR can be used to create immersive marketing experiences that can help businesses stand out from their competitors. But this technology has also opened up new avenues for payments in the form of virtual storefronts and payment systems that can be accessed entirely within the VR space.
One of the main benefits of VR in payments is the enhanced customer experience it provides, which can lead to increased customer loyalty and repeat business. Another advantage of VR payments is the added security, which leads to the risk of fraud minimization and sensitive customer information protection. This can be particularly important for businesses that operate in online gaming and virtual worlds, where payment fraud is a common issue.
Augmented Reality (AR)
Augmented Reality (AR) is a technology that overlays digital information onto the real world, which has already been used in the payments industry to create interactive experiences for customers. In comparison to VR, AR has the advantage of not requiring a completely enclosed headset or a designated physical space to experience it. AR can be experienced through smartphones or tablets and as AR technology is increasingly being used in mobile applications and is expected to grow rapidly in the coming years. AR payments offer a new and innovative way to make transactions, and businesses can leverage this technology to enhance the payment experience for their customers and the overall shopping experience.
One example of AR payments is in the beauty industry, where users can try on virtual makeup or hairstyles with an AR app and then purchase the products within the app. Similarly, fashion retailers can use AR technology to offer virtual fitting rooms that allow customers to try on clothes virtually and then purchase the items seamlessly within the app. By overlaying virtual images of products onto the real world, businesses can give customers a more realistic sense of how a product will look and feel before making a purchase. This can increase customer satisfaction and reduce the likelihood of returns and refunds.
AR technology can also be used to enhance tourism and education experiences by providing visitors with immersive virtual tours. With this technology, visitors could use their smartphones to scan landmarks and see augmented reality overlays that provide historical and cultural information. This could help make tourism experiences more engaging and informative, as well as create learning possibilities for students, helping to visualize and interact with historical events, scientific concepts and other educational content.
Other Frontiers
In addition to the metaverse, VR, and AR, there are other frontiers for payments that are worth exploring. Voice commerce and the Internet of Things (IoT) are two other technologies that are transforming the payments industry. Voice commerce allows users to make purchases using their voice, making the payment experience hands-free and convenient.
The IoT, on the other hand, facilitates autonomous payments by allowing devices to communicate with each other and make payments on their own. Smart fridges are one example of how the IoT can be used for payments. These fridges can automatically order groceries when supplies run low, providing a convenient and hassle-free shopping experience.
The payments industry is constantly evolving, and new technologies like the metaverse, VR, AR, voice commerce, and the IoT are changing the way we make payments. These technologies present exciting opportunities for businesses to offer customers more immersive and engaging payment experiences, and for users to make transactions more securely and conveniently.
As a payment service provider, COLIBRIX can play a significant role in the future of payments by offering innovative solutions tailored to the specific needs of its clients. Our expertise in payment technology and its ability to integrate with other payment systems can help businesses stay ahead of the curve and take advantage of new technologies to improve their payment systems.