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The Future in the Metaverse

June 15, 2022 6 min read
As our physical world, virtual world and digital world collide in the metaverse, consumers and merchants want to see how they can venture into the new unknown and profit from the goodies. But how will transactions and goodies be bought? *enter fintech, stage left*.
Unlimint Experts
Your payment experts
Unlimint Experts
Your payment experts

Last year we all saw the announcement of Facebook’s rebrand as a metaverse innovator. What does this mean? Facebook aspires to becoming a hub of opportunities for organisations looking to embed solutions into the next evolution in our digital world. Irrespective, the number of metaverses which have reared their heads into society has begun the shift into a world of collided realities – physical, virtual and digital.

What is the metaverse?

The metaverse is an interactive, collaborative and immersive virtual universe, which combines technologies for both virtual reality (VR) and augmented reality (AR). A lot of people and organisations have been intrigued to know what the metaverse is going to look like. It’s easiest to imagine it as a combination of universes, where people and businesses can in essence live their dream life. Imagine a world of online gaming with in-app purchases, combined with video conferencing tools to connect people across the world. Take this image and then imagine it all muddled with advanced technologies that we use in real life, like financial technology solutions, data management, trading, investment and more. But not everyone holds confidence in the idea, fearing a macabre death to society as we know it… in the physical world. Many investors believe that the metaverse will offer an immersive experience which is far richer than our real world. Consumers will be able to exist as a 3D avatar, roaming around unimaginable spaces, purchasing designer gear and trading goods. In essence, the metaverse will bring choice: travelling with friends whilst in the sanctity of your own space, accelerating peoples’ ability to make purchases, decide how much they want to buy, where they will live, how they want to work and much more. In a hyper-individualist society, we see from all angles how we are pushed further towards individualism – as seen in politics, tech, education, media bias and more; which will be further augmented in the submersion of the metaverse.  Whilst this vision is exciting for many innovators, the negative impact on brick-and-mortar stores and centralised industries in our real world is yet to be defined.

What has it got to do with fintech?

Since the announcement of Facebook’s metaverse, there’s been a spike in interest around the virtual space of what the metaverse will potentially offer. New technologies within the metaverse could become a leverage to develop new business models which are far more advanced and accepting of alternative financial ecosystems.

Financial technology solutions have been simplifying financial processes for several decades, plugging gaps and building bridges between merchants and consumers. The metaverse will be a new realm for interconnectivity with virtual experiences, through technologies such as virtual (VR) and augmented (AR) reality. These spheres will host opportunities for businesses to invest and consumers to purchase goods, experiences and more via numerous payment methods. Whilst a number of these methods are also fintech solutions (like our beloved blockchain, crypto currencies, digital wallets, etc.), the new and compelling side is that the metaverse will also be a transactional space. These finances and transactions will be fundamental to making the metaverse experience as immersive and ‘realistic’ as possible, and that’s where fintech thrives.

In recent decades we’ve seen huge fintech evolutions become engrained into society – with use of user data and fundamental purchasing platforms such as Amazon. This widespread adoption of fintech in our physical world, will simplify the transition to the metaverse. Existing solutions which have become fundamental to daily functionality such as digital wallets, mobile banking and more can be shifted to the metaverse and further enhanced with fintech innovations.

Technologies are already beginning to rear their beautiful heads in various metaverses, with cryptocurrencies in video games, and wider acceptance of non-fungible tokens (NFTs). Before the rising of the metaverse world, the gaming industry led the immersive experience, where games entered engaging, digital worlds and can make in-game purchases. Developers have since begun to strengthen the experience by integrating the acceptance of cryptos as an accepted payment method to boost sales in the play-to-earn model.

A major perk is that development of various metaverses is still relatively new, and there is no definition of what they will look like or offer. Fintechs are able to enter the sphere by integrating their solutions into the metaverse ecosystem. The future is bright and yet to be moulded, so it wouldn’t be impetuous to predict seeing experienced fintechs exploring the idea of their own metaverses.

What have we seen so far?

The gaming industry has shown strength and speed in adopting the concept. Considering the online monetisation of gaming that already exists, the concept is not so far stemmed from the normality of financially driven gaming experiences. Metaverse concepts have already become popular over the years, offering 3D avatars and microcosmic worlds to be built – Sim City and Minecraft, to name a couple. But the metaverse will extend the gaming universe, offering blockchain-based online games to thrive, with interoperability between players and developers. This experience will push improved playing and development at a faster pace and conventionalise AI/AR gaming. To predict the future, we must look at our learnings, and we have seen the gaming industry grow exponentially in the last 3 years, and the metaverse is the key to unlock further revenue. Monetising virtual goods, brand deals, AR concerts and play-to-earn will metamorphosise the industry as we have come to know it.

Another industry rapidly seeking access is the hospitality industry. Companies are not only eager to recover from the past 2 years, but to enhance touchpoints before the true hospitable event takes place. For instance, when looking at a holiday or hotel, we check open table, trip adviser and other platforms to review others’ experience and see what we’re paying for. The use of AR/VR will simplify the research steps taken by consumers, because they will be able to enter the metaverse and experience the location, product, etc. firsthand with a virtual/augmented reality tour. Numerous other industries are delving into the metaverse, finding profitability and interactions to keep their business alive. However, the metaverse will ultimately bring a foundation of knowledge and accessibility, providing consumers and merchants with endless opportunity to transact, make and receive payments.

Moreover, the ability to connect (in every way) is a key to the metaverse. Media and entertainment transitioned online in 2020, with streaming parties, virtual film viewings, digital concerts and more. Whilst the movement was driven by the pandemic, we have seen global entertainment companies, such as Disney, seeking an audience in the metaverse with VR experiences and AR events. And so, we can see that whilst the metaverse will be a great way to create jobs, boost revenue and enhance connectivity – it will become our future frontier for any business to tell its story.

You know the good old millennial and gen Z crisis of affordability in the real estate market? Well, in 2021 land sales within the Metaverse reached over $500 million USD. Since the end of 2021, a demand for virtual land has skyrocketed because of its position as an investment. Blockchain technology will facilitate people owning land within the spatial computing, which can be rented to inhabit or seek profit from services offered on your land through cryptocurrency. Using technological solutions from fintech, landlords can then transfer earnings into stablecoin to pay the rent of your physical home. The seamless profitability is in essence provided by fintech.

Fintech and payments

Coming back to our point of ‘what has this got to do with fintech’ or even ‘is the metaverse a fintech’ – the answer is everything, and so… yes. The past decade has shown accessibility to online financial services, as a key driver of fintech innovation. A large percentage of UK and US consumers now interact with fintech solutions, as a day-to-day routine. Recent years have shown regions of Sub-Saharan Africa and Latin America welcoming the adoption of fintech. With such thirst for digital solution, the adoption of the metaverse will come with the same salivation from merchants, as well as consumer expectations for quick accessibility.

Even the ecosystem of banking has significantly changed, with a spike in fintech solutions to encourage people to make financial decisions away from brick-and-mortar stores. Now people can make payments, lend, borrow, and receive remittances irrespective of physical limitations that may exist. The metaverse will only enhance this development. Whilst we may be able to build our world and dream buildings in the metaverse, there will be no room for ‘old school’ brick-and-mortar stores. Fintech is a leader in innovation and will be a fundamental driver for financial transactions in the metaverse. Ever the helper, fintech will continue supporting financial services and businesses to create a new ecosystem for their customers to engage and increase their learnings.

Managing transactions and finances in the metaverse is paramount, and fintech will facilitate the immersive experience which is comparable to real life. Consumer expectations will be similar to what they have in the physical world – but more advanced. Facebook’s digital wallet app with Coinbase augments the power of blockchain with transactions. And with an increasing number of virtual currencies, the metaverse will be required to act as a hub of digital currency that can be translated into stablecoins. And who else to turn to than the innovators who create the plethora of payments – fintech.

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