Billion-dollar questions: How will the metaverse change payments?

Meta’s Stephane Kassriel, Head of Commerce and Financial Technologies, speaks on freeing creators, next-gen security and the future of VR Shopping

Imagine rolling up for a party in a LA mansion in your new customized sports car. Inside, you hang out with famous sports-stars and musicians, maybe you even catch a private performance, or peruse a new exhibition from an artist. You like a piece of work, so you pay for it on the spot, or you see someone wearing a cool pair of sneakers and instantly get your own version. It sounds like a fun evening. Now, imagine you can do it all from your living room via an internet connection, a virtual reality (VR) headset and an online avatar. This is the promise of the metaverse, a hypothetical version of the web made up of interconnected 3D virtual worlds where you can work, socialize, and transact in real time.

Although the technology is still in progress, the commercial opportunities are potentially enormous.

The market for virtual goods is already approximately $200 billion a year. It’s been estimated that the total GDP of the metaverse could eventually reach $3 trillion. Of course, this figure includes both the economic impact of those spending money in the metaverse, as well as those working it – the millions of creators developing new digital artifacts or providing online experiences. And that is what is so exciting about the metaverse, that it will be much more comprehensive and multi-faceted than the current ways of engaging with the internet, acting more like a digital twin of the real world. From a technical perspective, for this vision of the metaverse to come about, there needs to be seamless interoperability between different virtual worlds, so users can easily navigate between them. There will also have to be sophisticated economic structures to support commercial activity. For example, mortgages to finance virtual property sales, collateralized with digital non-fungible tokens (NFTs).

Perhaps most importantly, the metaverse will require a robust and standardized payments infrastructure, so people can easily pay for the goods and services they consume.

One company that has been pioneering the shift to metaverse is Meta, which rebranded from Facebook in 2021 as a sign of its commitment to this emerging space. As well as creating the tools and platforms to allow people to experience the metaverse, Meta is also developing the next-generation payments models to support commerce in the virtual space.