Payments in Metaverse: Here's what you need to know

As the world of the internet evolves into the Web 3.0 era, the metaverse engagements whether they are corporate or social, are slowly rising too. Making transactions in the metaverse will become as ordinary as web browsing or social networking.

Web 3.0 is expected to bring quicker payment options such as PayPal and Square by following the path of Web 2.0. With this notion being actualized soon, the question arises, of how precisely these transactions will run in the metaverse. What does this then suggest for the payment industry's future, then? Let’s explore this facet in detail.

What are metaverse economies?

In the world of crypto exchanges, we are still in the initial stages of metaverse development. However, there are already a number of networks in the crypto market that give us a framework for what to anticipate from this brand-new blockchain virtual environment.

Each of these networks employs its native cryptocurrency and offers exchanges via its marketplaces as they currently use a closed economy to function. This idea is similar to how nations run when they have their own laws and fiat currency.

Although these currencies are not authorized for cross-platform transactions, the cumbersome process of withdrawing one platform's currency, trading it for another on a third-party exchange and then buying another coin to enter a new metaverse economy is expected to be eliminated over time. And besides, weren't those the fundamental ideas that spurred the foundation of Bitcoin in 2009?

NFTs: A common denominator

The ownership of digital assets is a crucial part of these blockchain economies and a cornerstone of the Web 3.0 movement. NFTs are gradually gaining momentum worldwide as they offer the ownership of everything like content, real, physical objects, or in-metaverse objects.

The non-fungible tokens (NFTs) are a kind of digital asset which utilize the power of smart contract technology. As compared to other cryptocurrencies like Bitcoin and Ethereum listed on the crypto exchange, NFTs are distinct as they are only created to symbolize a single object only. Although they can be exchanged, they can never stand in for anything else.

For enabling the full functioning of the NFTs within the metaverse, platforms like Sandbox and Decentraland are required to offer a payment system. To serve this very purpose, these networks have developed in-app marketplaces. But, doing this also needs other kinds of payment solutions.

After understanding what are metaverse economies and how NFT works as a mode of payment, let’s take a look at the current payment systems in the metaverse. They are as follows:

What are the current payment systems in the metaverse?

1. Cryptocurrency Payments

When it comes to making transactions within the metaverse, cryptocurrencies using blockchain

Technology become the obvious choice to do payments. It is because of this, fiat currencies become quite inferior as the near-instant, added security bonuses provider, cross-border and economical payment system outshines them.

1. Fiat Payments

Fiat payments are done all over the world. These payments can e dealt with in one of two ways: through the native currency of the platform (which makes use of the same platforms as those mentioned above, but only after the payment has been settled before the user can transact) or via centralised payment processors like PayPal and credit card companies like Visa and Mastercard.

1. Buy Now, Pay Later Payments

In 2022, the hottest trend in the payments sector is buy now, pay later (BNPL) payments. These payments enable the users to extend the initial cost over other payments. It is traditionally utilised for buying physical goods, cryptocurrencies could make this latest craze extend from crypto exchanges to the metaverse.

To wrap it up, there is plenty of space for innovation to allow payments to be functional in the metaverse. Although fiat payments are currently making the wave by dominating the space, it is going to soon end, due to the rising adoption of cryptocurrencies.

Rea Setia is an passionate writer. She loves to share business tips and her experience about industry.