VR Payments Will Take the Technology into the Mainstream in 2018
By Elena Mesropyan for LTP
Virtual reality (VR) is probably one of the biggest shots for the retail industry given the rapidly increasing number of adoption cases. In fact, some professionals suggest that by the end of 2016, an estimated 43 million people will own VR products worldwide, and this is set to grow to 170 million by 2018.
The idea of applying VR technology in retail is to bring together the best of online and physical to create superior shopping experience across industries. Some estimations suggest that VR has grown by nearly four times in the last year, indicating a firm interest in the technology and its applications. Headsets like Oculus Rift, HTC Vive, PlayStation VR and Google Cardboard are expected to define the future way to browse through offerings and to shop.
At the moment, however, the only link missing in the idea of applying VR tech for boosting commerce is the payments component. One of the pioneers, in this case, is Alibaba, which just this October demonstrated a payment service that will allow virtual reality shoppers to pay for things in future just by nodding their heads.
Lin Feng, who is in charge of Ant Financial’s incubator F Lab that has been developing the payment service over the past few months, told Reuters, “It is very boring to have to take off your goggles for payment. With this, you will never need to take out your phone.”
As explained by the edition, user identity can be verified on VR Pay via account logins on connected devices or via voice print technology that recognizes each person’s unique voice. Lin said this was the most convenient method in a VR setting compared with other biometric recognition technologies. VR Pay is expected to be ready for commercial launch by the end of this year, allowing Alibaba’s 400 million customers to buy products from stores all over the world, by wearing a VR helmet or glasses designed to simulate being in a physical store.
As Zhuang Zhuoran, Senior Director of Mobile at Alibaba, commented, “VR is a great way to demonstrate products or services, especially for some categories, like furniture and travel products. It also adds more fun to shopping.”
A British charity, Comic Relief, has also been speaking in favor of bringing VR payments opportunities into the mainstream in the light of facilitating donations. Comic Relief CTO Zenon Hannick shared his opinion on the importance of immersive experience in facilitating transactions, saying, “You have to show the audience where the money has gone so they feel engaged. We as a charity fund other projects, so it’s about telling their stories. There’s a powerful story we can create about how the money we take can change people’s lives, and VR can be a big part of telling that story.”
For commercial payments, the idea is similar – VR is a strong engagement realm that would facilitate immediate payments. At the moment, the friction of taking off the headset for making a payment is a gap where doubts over a choice crawl up and result in abandonment. By bridging that gap and keeping the potential customer engaged in a wholesome VR experience, companies offset the risk of lost interest and unsatisfied intention to buy something.
As reported by the Computing, although Comic Relief’s Hannick clearly sees VR as the future platform for the charity, he notes a lack of wide-scale adoption of the technology coming until at least 2018.
“2017 will be the trough of disappointment for VR. There’ll be some interesting storytelling experiences next year, but 2018 will be when it goes mass medium.”
Among other initiatives in the segment is Mastercard’s tie-up with Wearality, an Orlando-based startup that designs virtual reality glasses and wearables, to allow consumers to identify an item within virtual reality experience and buy it without leaving the virtual world.
In March this year, Mastercard demonstrated the future of commerce tied to virtual and augmented reality commerce experiences and payment-enabled wearables at the Arnold Palmer Invitational Presented by Mastercard (API) in Florida. In the official press release, the company said that soon golf fans may be able to shop for Graeme McDowell’s equipment and G-Mac apparel while teeing off with him on a virtual fairway. Or, while out on the course, golfers might simply tap their golf glove at the point-of-sale to buy refreshments from the beverage cart – no wallet required.
Given that users are expected to spend as much as $7.9 billion on VR headsets and $3.3 billion on VR entertainment by 2020, VR payments seem to be a logical and necessary course of development for retail companies and financial institutions. Wearable technology will play a key role in connecting a payment solution with items in the virtual world, which makes all initiatives by technology companies to incorporate payments feature in their gear a forward-thinking move, Samsung being among those first-movers.
In April this year, VR Life reported Head of Samsung Pay Europe Nathalie Oestmann sharing that enabling people to enter a store with their virtual reality headset and browse the store in VR is being considered by the company. Users can then easily click and pick whatever they want to purchase and pay for it inside the VR environment with Samsung Pay. The solution would allow users to easily discover stores and shops, and if it does happen eventually, it would be something truly unique to Samsung’s VR technology and its payments service.
First appeared at LTP