Payments in AR, VR, and the Metaverse
We look at the current state of payments in AR and VR, the future of buying in the metaverse, and how businesses can help customers embrace change.
Consumers have grown increasingly accustomed to the world of Augmented Reality (AR) and Virtual Reality (VR), mainly thanks to their adoption in retail and other experiential settings. And these blossoming tech trends are only set to become more popular, with excitement building around Apple’s recently announced Vision Pro headset.
However, despite the growing prominence of AR and VR, our Lost in Transaction 2023 research found that consumers are yet to embrace paying for products while in an augmented or virtual world.
We look at why this may be the case, how payments in AR and VR could be a boon for businesses, and what the next great tech trend – the Metaverse – could mean for customers’ buying experiences.
The current state of AR and VR
AR and VR’s use in retail was pioneered in 2014 by clothing chain Topshop and home improvement company Lowe's, but now countless others embrace this technology to enhance the shopping experience, from Ikea, to Amazon and ASOS. Using AR and VR in these settings, customers can 'try' products or 'see' them before they buy.
Unsurprisingly, the success of AR and VR in bringing new experiences to customers has seen it proliferate through other industries, from travel to online gaming, iGaming, sports, cinema, and other entertainment products. As a result of this, payments are being integrated into AR and VR to ensure consumers can complete purchases without disrupting the experience. But according to our research, customers are yet to respond, with only 3% of respondents having used AR or VR to purchase goods. There are, however, signs of progress, with appetite for AR and VR payments growing with demand for AR and VR-driven experiences.
Security is no issue with AR and VR payments
Security concerns often pose the greatest barrier to adoption for any new payment technology. This is understandable – financial data is arguably the most sensitive data a consumer can share. It’s no surprise customers want full trust in a technology before handing over this information.
However, while they are still relatively new additions to consumers’ lives, our research found that security concerns around AR and VR payments are presenting little barrier to adoption.
While older respondents — over 65s in particular — are more likely to say AR and VR doesn't seem safe than younger respondents, concern about the technology's security is low across the board. Overall, only 12% of respondents say they wouldn't use AR or VR to purchase goods because they don't seem safe.
Excitingly, there seems to be growing appetite for payments in AR and VR. In our report, we asked if respondents see themselves using VR and AR to purchase goods in the next two years. Over a quarter (27%) of respondents see themselves using VR and even more (28%) see themselves using AR if these technologies become more widely available and they learn more about them.
With this in mind, it’s clear that expanding the availability of these technologies is essential to greater payments usage.
Do people want to buy in the Metaverse?
While AR and VR may be relatively new technologies, the Metaverse is younger still. In fact, this single, shared, 3D version of the internet is still technically hypothetical, even if some online videogaming universes have been described as forming part of it.
However, its nascency doesn’t seem to have impacted consumers' views about payment safety.
While the number of consumers who wouldn’t purchase goods in the Metaverse because it doesn’t seem safe is higher (17%) than those who wouldn’t purchase using AR or VR, the number is still relatively low. Much like AR and VR, security is yet to become a barrier to adoption for payments in the Metaverse.
This may change when the Metaverse is released, but the current appetite for making payments on the platform is encouraging, to say the least, with just over a quarter (26%) of respondents seeing themselves making a purchase in the Metaverse in the next two years if the technology becomes more widely available and they learn more about it.
As adoption of AR, VR and the Metaverse grows, payments will play a significant part in how businesses evolve their offerings to customers, delivering more seamless experiences of the latest and greatest tech.
