Meta, formerly Facebook, aims to monetize the metaverse by expanding the digital wallet capabilities available on the company’s social networks.
This month, the company changed Facebook Pay to Meta Pay and continued to offer the payment service for items in online stores and Facebook, Messenger, Instagram and WhatsApp. The service allows people to make purchases without entering payment details every time. Meta Pay does the same thing the metaverseaccelerating sales of digital items, art and tickets to virtual events, said Meta CEO Mark Zuckerberg.
“The easier you can transact, the greater the opportunity for creators,” he said in a Facebook post.
Meta Pay could make the metaverse more attractive to retailers, as simplicity leads to more consumer spending. a 2020 Study of the Marketing Science Institute found that customers spend 17.4% more on shopping sites after sellers buy with one click. Conversely, 17% of consumers in a Statista survey abandoned their online orders because the checkout process was too complicated.
The immersive nature of the metaverse makes easy buying essential, said OnConvergence analyst Tom Brannen. Suppose customers interact with the metaverse on a virtual reality (VR) headset. In that case, they don’t want to take it off of typing in a credit card number.
“The logistics of our traditional payment systems will have to be completely redone for that world,” he said.
Meta wants to be the first to have a wallet when the metaverse economy takes off, Brannen said. If the company doesn’t have an easy way to pay for purchases in its virtual world, a competitor can pop up and reap the profits. eBay was slow to build a payment option for its auctions, so PayPal solved the problem and made millions. eBay bought PayPal for $1.5 billion after failing to compete with it.
Meta faces an uphill battle. Facebook Pay isn’t as popular as PayPal and Venmo for buying items online and sending payments, said Martha Bennett, an analyst at Forrester Research. Apple has a widely used digital wallet, Apple Payand reportedly has its own metaverse plans with a VR or augmented reality (AR) headset in the making.
“Facebook Pay is way behind other payment mechanisms,” Bennett said.
Meta’s ambitions for Pay go beyond payments, Zuckerberg said. Customers can use the wallet to prove they own a virtual good and use it on metaverse platforms. Meta Pay can also help users confirm their identity in the metaverse. The company did not provide details on how these capabilities would work.
Last year, Meta spent $10 billion on its metaverse division, chasing a market Estimates of constellation research could reach $21.7 trillion by 2030. However, this spring, Meta announced that it would spend less on developing the metaverse in light of moderate sales growth.
Meta’s spending has given it a strong foothold in the VR/AR market. The company’s Meta Quest 2 accounted for 80% of AR and VR headsets sold worldwide in 2021, according to research agency IDC†
Mike Gleason is a reporter on unified communications and collaboration tools. He previously covered communities in Massachusetts’ MetroWest region for the Milford Daily News† Walpole Times† Sharon lawyer and Medfield Press† He has also worked for newspapers in central Massachusetts and southwestern Vermont and was a local editor for: patch† He can be found on Twitter at @MGleason_TT.