How is Metaverse Redefining the Future of Digital Payments in the UAE?

  • August 15, 2022
  • 4:50 Minutes

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Just as technology plays an essential role in the virtual world, payments are another crucial part. While it is paramount to offer a seamless user experience through the metaverse, virtual assets will have to be transferred using virtual currency.

But are we future-ready to experience the metaverse with digital currency? Which digital payment methods can you use to transact in a virtual world?

This blog explains what metaverse is, its impact on the fintech industry, and digital payment methods that you can use in the metaverse.

What is Metaverse?

Metaverse is a virtual world that is created using advanced technology where you can virtually move, shop, get entertained, meet people, play, and work. It is a digital universe that lets you do almost everything you can in a physical world but virtually.

For example, you can attend a music concert in the metaverse, play games with your friends, meet friends at a cafe in a shopping mall or buy clothes for your avatar.

Metaverse is built using various advanced technologies such as

  • Blockchain
  • Internet of Things (IoT)
  • Virtual reality (VR)
  • Augmented reality (AR)

It is a constantly developing digital universe where new technologies are used to enhance the user experience. However, many other new technologies could be used tomorrow to optimize the metaverse experience.

Thus, it will keep impacting different industries, and it has so far impacted the fintech industry the most. Let’s see what impact it has on it.

Impact of Metaverse on the Fintech Industry

As the virtual world allows everyone to explore regardless of the physical boundaries, it involves financial transactions to enhance the user experience. The fintech industry is the most impacted industry due to the emergence of the metaverse.

Let’s see how the industry will grow amid the growth of the metaverse.

Increased Use of Non-Fungible Tokens (NFTs)

NFTs are unique tokens in the form of financial security with digital data (photo, video, digital content) stored in them that can be sold or traded. Thus, if you want to share, sell, or trade your digital assets, you can create your NFTs using blockchain technology.

Metaverse will enable us to create our own NFTs and flow it into the digital world through fintech companies. Many fintech companies have allowed creators to sell their digital assets through NFTs in the metaverse.

Fintechs to Create Their Own Metaverses

Prominent fintech players will have their metaverses set up to allow their users to experience a broader and enhanced virtual reality world. Since the fintech companies have the technology and digital payment solutions with them, they are well-positioned to build their own virtual worlds.

The rise in Decentralized Finance (DeFi)

Since the metaverse is a fully digital world, traditional banking will have no place in it. However, decentralized financial instruments will dominate the virtual financial market in the metaverse. Defi is an unregulated financial instrument that is developed using blockchain technology without allowing any intermediaries in the transactions.

Metaverse will enable more fintech companies to develop multiple Defi instruments to allow users to use them in the digital reality world.

Talking about financial transactions, how in the virtual world will you be able to make payments?

Let’s look at the payment options available as of now to make payments in the metaverse.

How will Payments be Made in Metaverse?

The digital transformation market in the world is anticipated to grow at 15.6% CAGR until 2030. While the digital economy is increasing, digital payment methods have evolved over time.

Metaverse will have e-wallets and cryptocurrencies as the most popular digital payment methods. However, as new technologies are developed, new payment methods will continue influencing the payment methods in the metaverse. 

Related: The Future of Digital Payments In UAE – 5 Key Trends of 2022

e-Wallets

A digital wallet or e-wallet is one such digital payment method that you can use in the metaverse to perform your financial transactions. These e-wallets are electronic wallets that allow you to send/receive money electronically, shop online, or use them to pay your bills digitally from an app on your phone.

It can be conveniently used in the metaverse, whether you want to buy a cup of coffee for your friend, shop at the mall for your avatar, or pay your virtual employees from your virtual workplace in a metaverse.

Cryptocurrencies

Cryptocurrency is a popular payment method widely used in the metaverse. Since it is a digital currency stored in a digital wallet on a crypto exchange, it is considered the apt payment method for the metaverse.

Thus, it is evident that the virtual world will have digital currency and digital payment methods that allow users to perform financial transactions digitally from their phones.

As the physical world adapts to the new virtual world, Dubai’s government has recently launched its metaverse strategy. Let’s see some of the key highlights of the strategy.

Key Highlights of the UAE’s Latest Metaverse Strategy

  • It will add 40,000 jobs to Dubai’s economy in the next five years.
  • The strategy aims to place Dubai as one of the top ten metaverse economies to shape the future of the latest technologies globally.
  • It expects to have 5000+ blockchain and metaverse companies in the next five years.
  • Blockchain, cryptocurrencies, and Web3 will contribute the most to developing the metaverse economy in the emirate.
  • Enable companies to innovate and build solutions to offer customized user experiences.

Thus, considering the recent developments in the digital world, the metaverse will be the virtual reality world for the upcoming generations. It will allow you to perform all real-world activities virtually, from meeting friends, working, and playing, all while having a sip of your morning tea sitting in your drawing room.

Stay on Top of Metaverse and Digital Payments

Payit is a mobile wallet application that allows you to make payments digitally from your phone. Download the payit app to stay on top of your digital payment requirements.

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