*Originally published on CUInsight.com
In 2009, Bruce Willis starred in a movie called Surrogates, featuring a futuristic world where humans interacted through surrogate robots. At the time, the thought of living a life by proxy seemed otherworldly. However, if you’ve noticed the accelerating number of headlines about the concept of a virtual second life is being embraced by major corporations.
So what is the metaverse? According to the NY Times, the metaverse is the convergence of virtual reality and a digital second life where virtual reality serves as a computing platform for living a second life online. In short, you and your avatar interact with others in a digital, virtual reality environment. This is seen as a step into ‘ambient computing’, which according to Digital Trends is “an environment of smart devices, data, A.I. decisions, and human activity that enables computer actions alongside everyday life, without the need for direct human commands or intervention”. This is not a foreign concept for gamers, as social elements of the metaverse are already there in games like Fortnite. For the rest of us, the metaverse is still very important to understand as it’s now attracting big business.
Here are five news stories that we find interesting about the metaverse as it relates to payments:
- Meta – Meta, formerly known as Facebook, has a virtual reality environment called Horizon Worlds that launched in December 2021. It’s now testing a payment mechanism that enables creators to sell virtual assets and content in Horizon Worlds. Their plan is to take more than 47% of sales in charges and fees.
- Fidelity Investments – Fidelity Investments has expanded two new thematic ETFs (exchange-traded funds) into the crypto and metaverse industries. Fidelity Metaverse ETF makes it possible for investors to invest in companies that develop, manufacture, or sell products/services related to the metaverse.
- JP Morgan – JP Morgan recently became the first bank to enter the metaverse, opening a lounge in Decentraland. Their Onyx lounge allows institutions and businesses the opportunity to enter the metaverse. According to JP Morgan, the metaverse poses a market opportunity of $1 trillion in annual revenue. For transactions specifically, they report that $54b is spent yearly on virtual goods.
- Major Card Issuers – Visa, Mastercard, and American Express are all making moves in the metaverse. American Express has made trademark applications that demonstrate that they have plans, and although they are not yet sharing their exact plans, they say that “metaverse is a space we’re following”. While Visa has not yet made any filings their Consulting & Analytics arm has begun to advise financial institutions on the metaverse and how it will impact their future. Mastercard’s patent and trademark filings have also revealed that they are planning to move into metaverse commerce, although they have not yet shared plans publicly.
- HSBC – HSBC will be purchasing a plot of virtual land in the gaming environment The Sandbox (typically used to host games and contests). HSBC plans to use their plot of land to connect with sports and gaming enthusiasts. According to HSBC, “The metaverse is how people will experience Web3, the next generation of the internet—using immersive technologies like augmented reality, virtual reality and extended reality,” said Suresh Balaji, chief marketing officer for Asia-Pacific at HSBC. “At HSBC, we see great potential to create new experiences through emerging platforms.”
As the year progresses, we expect to see many more stories like this. The growing popularity of the metaverse demonstrates the importance of having a modern payments platform that allows your financial institution to quickly innovate in response to the industry trends.
To learn more about what to expect this year, read the article, Payments in 2022: What You Need to Know.
Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.
