Payments in VR, AR and the Metaverse: consumers are ready for new experiences

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 VR and AR, 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 VR and AR 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 VR and AR

VR and AR’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 VR and AR in these settings, customers can 'try' products or 'see' them before they buy.

Unsurprisingly, the success of VR and AR 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 VR and AR 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 VR and AR payments growing with demand for VR and AR-driven experiences.

Security is no issue with VR and AR 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 VR and AR payments are presenting little barrier to adoption.

While older respondents — over 65s in particular — are more likely to say VR and AR 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 VR and AR. 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.

What is the future of buying in the Metaverse?

While VR and AR 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 VR and AR, 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.

To learn more about how consumer payment trends are changing, download our Lost in Transaction 2023 report.