When the term “metaverse” was first featured in Neal Stephenson’s novel Snow Crash, which depicts a dystopian world where people escape into an alternative 3D, connected reality, the first mobile phone was yet to become mainstream, and the arrival of Google was still some years away.
Fast forward three decades and our lives are now dominated by smartphones and internet accessibility. Meanwhile an entire generation has just spent several years learning and interacting solely online.
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Digital worlds that see people interact, work, and create are nothing new and all of these elements form intrinsic parts of the emerging metaverse space. Meanwhile the adoption of metaverse-supporting technologies such as Virtual Reality (VR), Artificial Reality (AR) and social and professional digital platforms, continue to further accelerate its development.
An introduction to the metaverse
The term “metaverse” can be difficult to pin down with many defining it in different ways. However, a definition that might serve as an umbrella term is “any technology concepts that encompass the merging of digital and physical worlds,” such as those mentioned above.
It’s important to emphasise at this stage that the metaverse is not just one entity. It refers to a network of online worlds, which will likely grow even bigger as the market gets more competitive. The future success of the metaverse depends greatly on the building of robust interoperability across services, so that different companies can coexist in harmony and users can move from one brand to another quickly and seamlessly.
Regardless of how the metaverse is defined, it is quickly becoming the norm for many, and today’s tech-savvy generation is more likely to be spending time in virtual worlds and participating in a range of “metaverse-esque” behaviours. The truth is that younger people have been in the metaverse for some time, playing sandbox video games where they can interact in open virtual worlds, from Fortnite, to Animal Crossing, to Roblox, and Minecraft—and they’ve been embracing brands who market to them within these games.
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By GlobalDataAre businesses prepared for metaverse adoption?
In recent years, organisations have been forced to go online – whether they like or not – while work has become more digital and tech-infused. The metaverse and its enabling technologies are steadily amplifying new ways to help companies achieve a range of goals from increased sales, operational efficiencies to learning and development. And many companies are already investing, aiming to deepen customer loyalty, engage in new ways with their communities and grow revenue.
The metaverse promises options to enrich customer experience, create virtual-only products and market physical and digital products and services. It will do all this with its own payments and financial systems which, of course, suitable hardware and applications to support all these activities.
Ultimately, entering the metaverse will mean different things to different businesses. For a small start-up it might mean building smarter AI to address customer questions. For another, it could be an entire VR world. But the best place to start might be to use the current state-of-flux around the metaverse and look at their organisation’s digital infrastructure while identifying the areas that they can tweak and develop.
How does regulation apply to the metaverse?
As is often the case with new technology, regulation can take time to play catch up and the metaverse is no exception meaning that there are no firm regulations in place at present. However, it is likely that the metaverse will fall under jurisdictional review and regulators will want to ensure consistent controls are in place to ensure the environment and its operators are meeting agreed standards. For the metaverse to become a viable, mainstream place in which to do business, it will eventually require a set of regulatory controls and codes of conducts, to keep organisations and end users safe when transacting in it. What that might look like remains to be seen at this stage.
What do payments look like? And what is an NFT?
Just as in the physical world, payments in the metaverse can be made in various ways, but the most common way is via blockchain and digital currencies, which users can utilise to purchase goods and services from merchants within the metaverse.
Cryptocurrencies represent the monetary connection between the physical and virtual worlds. Users wanting to purchase any goods in the metaverse can exchange their local fiat currencies into cryptocurrencies by setting up a crypto wallet and using an exchange like Coinbase to make the conversion. However, each metaverse has its own set of accepted digital currencies, so users need to know the payment methods the platform accepts before making any exchanges.
No less important than crypto are NFTs, or Non-Fungible Tokens, which means that each token represents a unique item with blockchain records storing information about the digital file.
NFTs are steadily becoming popular in the metaverse as a form of digital ownership because they can be easily hold, transferred and used as a digital certificate of an underlying asset in the metaverse.
Cryptocurrencies may be the logical fit for payments in the metaverse, but a key element to bridge the gap with the real world is to enable users to use their traditional electronic payment methods like credit cards or mobile payments. By incorporating established systems, this can make the tech more accessible, allowing for users to engage with metaverse technology which in turn will enable a potentially smoother path to user participation and adoption.
Investing in the future
The metaverse has the potential to be the next version of the Internet, providing us with all the capabilities to unleash new opportunities that will accelerate us to the next stage of digital transformation. Companies that are open to adopting early will have an advantage when the metaverse eventually become more mainstream. Whether or not an organisation hops on the trend immediately, preparing a strategy and positioning themselves will stand them in good stead, preparing them for the growth to come.
Sascha Münger is Head Competence Center Crypto Related Products & Metaverse within the Global Business Division Commercial Acquiring at Worldline Global. In this role, he is responsible for products related to crypto payments at the point of sale and in eCommerce as well as future commerce scenarios in the Metaverse. Previously, he was responsible for the implementation of the payment processing module within the TWINT system at SIX Payments Services (predecessor organisation of Worldline).
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