The future of payments in the metaverse and main challenges

From blockchain to digital payments. See how the future of payments in the metaverse has been shaped and challenges can be overcome.

João Paulo Notini
April 20, 2022
8 min read

Metaverse has been a hot topic of discussion since the last year when Facebook surprised the world after rebranding to Meta (a direct reference to the metaverse), and started to promote this “digital reality”. During an interview to The Verge, Mark Zuckerberg stated that the company would be shifting the focus from a social media platform to a “metaverse company” throughout the next five years. 

A few months after Zuckerberg’s big news, Microsoft and Nvidia announced that they were working on their own metaverse and became loud voices in favor of this topic. Now, several companies are approaching the metaverse and thinking about how they can generate revenue from it. And, what is in the backbone of revenue generation? Payments!

Payments are enablers for of monetization model and, in the metaverse, there are key challenges that need to be overcome. Thus, keep reading to discover this whole new world.

A very attractive market 

Bloomberg has estimated that by 2024 the metaverse market may reach USD 783.3 billion, compared to USD 478.7 billion in 2020. This represents a compound annual growth rate of 13.1%. Sounds appealing, right?

When we talk about the metaverse we are referring to a virtual world and, therefore, physical cash can’t be applied. Living in this world requires a proper virtual system to ensure all transactions, and digital payments are the main ways to sustain it. 

Visa’s 2022 report – “The metaverse as a strategic inflection point”, points out that the metaverse has its own virtual economic system where users can trade and monetize digital content. There are built-in tools in these digital worlds as well as their own currencies, which can be cryptocurrencies in some platforms. 

Some financial companies have already started making movements towards the metaverse. American Express, for example, has filled a trademark for tech to let people use its payments cards in virtual worlds. The company intends to provide card payments, ATM services, banking services and fraud detections for metaverse users.

Moreover, in August of the last year, Visa entered the metaverse after buying a USD 150,000 NFT (non-fungible-token). According to Forbes, “if the metaverse merchants are bound to transform the economy, Visa sees its role in being the engine of that revolution.”

As we can see, financial institutions are becoming attracted by the metaverse. Yet, not only them, but any other business in this virtual world will need to adapt its revenue generation strategy. How? Through digital payments. 

Blockchain and digital payments

Blockchain technology is one of the main foundations of the metaverse. If you don’t believe it, remember that it is a highly safe and inclusive transaction way. It also enables users to trade without the supervision from regulatory bodies, governments or other organizations. 

Besides its high level of security, blockchain enables instant payments and, with crypto payments, favors the settlement of digital assets such as NFTs and cryptocurrencies. 

As stated by Ali Popa in his The Paypers‘ article, “these assets could be traded, sold, and marketed through the metaverse marketplace tied to an individual’s blockchain based payment wallet or equivalent, meaning a secure, instant, scalable way of accepting a payment for commerce.

According to the Digital Journal’s – ˜A Guide to Payments in the Metaverse ˜, purchases in the metaverse are enabled by crypto wallets or the use of an exchange such as Binance. This way, flat currencies can be converted into cryptocurrencies and users can make transactions in the digital world. Remember, however, that each metaverse platform has its own financial economic system, with its own set of digital currencies and payment methods accepted. 

Along with cryptocurrencies and aligned to the blockchain key role for the metaverse, there are non-fungible tokens (NFTs). They are tokens that represents the ownership of unique items and are not interchangeable. Furthermore, since they are created on blockchain platforms, they can be transferred to other people and accepted as payments in the metaverse just like cryptocurrencies.  

As explained in Visa’s 2022 metaverse report, several global tech companies have developed their own “super apps” with digital wallets within it. Facebook/Meta, for example, developed the ‘Novi.’21. 

There are also super apps for physical services, and they also have their own wallets within it – e.g.: Uber Wallet (Uber), GoPay (Gojek), Bolt Wallet (Bolt) and GrabPay (Grab). – Looking at a more broad service model, there is Amazon Wallet in Western countries. Meanwhile, in Asia, Tencent and Alibaba have their own “super apps” running for almost a decade already. 

So, why digital wallets are so important for financial institutions or any company transacting in the metaverse? Well, mainly because they are a great digital payment option that can facilitate trading digital assets, like NFTs and cryptocurrencies. They are, also, safer options for the merchant, but we will explain it in the next section.

˜With digital wallets becoming a focal point of digital asset trading and having the potential to become a form of digital identity, financial institutions should consider building a strong position in digital wallets and pursuing the associated opportunities”, reported Visa.

Challenge and solutions

The metaverse is still very incipient and there are several challenges for merchants, financial institutions or any business that wants to reach this new world. When it comes to payments, issues in regard to data privacy, payment fraud are very concerning. Also, customer behavior and shopping preferences may represent a big adaptation challenge for some organizations. 

Payment frauds as key issues

As pointed out by the Digital Journal’s payments guide in the metaverse, this new digital world is still in its early development stages, so it is more vulnerable to cyber attacks. There are few regulations and protection measures to prevent cybercrime. These crimes include data theft, phishing attacks, false chargebacks, merchant identity fraud, etc.

Chargeback fraud risks are, especially, a great concern. However, merchants can overcome the risks through cryptocurrencies, since most cryptos don’t support chargebacks. By doing so, customers will need to deal directly with the merchants if they want a refund after unauthorized or regretful purchases. 

Alternative payment methods, such as digital wallets, are another way to avoid frauds. When merchants have their own digital wallets, their shoppers will also need to contact them directly in case of any purchase issue. 

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Finally, according to The Digital Journal, traditional payment methods like credit cards are accepted in many metaverse platforms. Although they are more susceptible to chargeback fraud risks, these type of payments are controlled by financial institutions. They can also generate more sales to merchants, since not everyone uses cryptocurrencies. Visa has also reported that alternative credit scoring methods are being developed for millennials and the Gen Z, which, as we are going to show next, are the main audience in the metaverse.

“Alternative credit scoring models are being developed for millennials, Gen Z and other segments to fill a gap left by traditional credit scoring models, that used to focus primarily on financial data. For example, alternative algorithm-based credit models can use other types of data to provide a broader view of a consumer’s reliability and financial behaviors.” retrieved from Visa’s 2022 report – “The metaverse as a strategic inflection point”.

Focusing on the Gen Z 

Visa’s report has evidenced that typical metaverse platforms are used by young people. Zepeto, for example, has 80% of its users considered teenagers, while 54% of Roblox users are less than 13 years old. This means the Gen Z audience is crucial for all companies involved with the metaverse and, in regard to payments, merchants in the metaverse need to choose options that are popular among the new generation. 

Despite digital wallets, there are other alternative payment methods appreciated by young people, such as buy now, pay later (BNPL) solutions and instant payments. Hence, finding ways to include these payment options in the metaverse is definitely a competitive advantage.

The metaverse has a high potential in becoming the next-generation platform. Why? Because, besides having a young customer base, they have unique monetization models. Rather than technology, the metaverse is monetized through human interaction. Aligned with the digital assets mainstream, such as crypto and NFTs,  there will be new monetization ways to stimulate users in participating in both, content creation and consumption. 

Lastly, companies can generate revenue in the metaverse by advertising and sponsoring content for the Gen Z audience. Meanwhile, for financial institutions, Visa’s report recommends that they should pursue ways to develop a new platform strategy. They could, for example, partner with emerging metaverse platforms that have relevant value propositions and provide enhanced users’ data. 


The metaverse will be an endless world that will connect both physical and virtual realities. Although we are living in the early stages of it, it is becoming popular very fast, especially among millennials and the Gen Z.

Read also: The future of payments in Latin America is instant

The digital assets mainstream has also arrived to the metaverse, so cryptocurrencies and NFTs are booming there. Therefore, blockchain technologies have a vital role in this virtual reality and, along with digital payments, enable transactions between users. 

As companies become increasingly interested in this whole new market, new revenue generation strategies are developed. These strategies must focus on the younger generation, and must be tailored to overcome the existing fraud risks of the metaverse.

Along with alternative credit-scoring models, which ultimately protects the merchant that offers traditional payment methods such as credit cards, there are alternative payment methods. So, when it comes to payments, merchants could find ways to increase their market size by offering digital wallets, BNPL solutions and instant payments. All of that  considering the risks and benefits of each method in the metaverse.

João Paulo Notini
João Paulo Notini
Senior Content Marketing | Cross-Border operations at EBANX

EBANX Retail & Marketplace Solution

It’s time to enhance your retail marketplace in Latin America with a tailored approach to payments.

Report: Gaming in Latin America

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