Just a few years ago, the metaverse looked like the next platform shift, promising immersive digital worlds where people would live, work and transact at scale.
Today, Meta’s virtual universe is not dead but it certainly has shrunk and left is a sobering record of investment, stalled consumer adoption and a set of hard lessons about how innovation in payments and commerce really happens.
Early Warnings
In her 2023 column, “How Facebook Turned the Metaverse Into a Buzzword,” PYMNTS CEO Karen Webster argued that the term “metaverse” had been co-opted by Meta’s rebrand and a wave of hype that diverted money and attention from technologies solving real problems in the physical world.
She noted that Meta’s vision positioned the metaverse as a place where people would effectively “give up the physical world to live in a virtual one,” while most people actually wanted technology that made their real-world lives more convenient, connected and efficient. Webster wrote that innovators had already spent a decade building a “connected economy” that blended physical and digital channels, and that none of those use cases required people to abandon the real world.
Her conclusion: Entrepreneurs and investors should “stop chasing the metaverse rabbit,” because it would likely deliver “few popular use cases and little return for their efforts.” That assessment looks prescient.
What the Early PYMNTS Research Saw in the Metaverse
At roughly the same time, PYMNTS and Payoneer published “Enter the Metaverse: The Next Frontier of Digital Commerce.” The playbook framed the metaverse as an “immersive internet,” accessed through VR headsets and built on technologies such as blockchain, artificial intelligence and NFTs. It described a “virtual wild west” in which no dominant player had yet emerged and where innovators from fashion, sports, real estate and gaming were experimenting with new ways to monetize virtual space.
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The report emphasized that payments would “bridge the gap between the physical and digital worlds” and “link metaverse platforms together,” outlining three core functions: connecting real-world and virtual currencies, moving value across different metaverse platforms and building interoperable ecosystems that could plug into multiple environments. It also stressed that flexible, modular payments infrastructure would be “the key to metaverse success,” since businesses would need to add and remove wallets and methods as standards evolved.
The ingredients were there on paper. What’s yet to arrive is sustained, mainstream demand.
Reality Labs, Budget Cuts and a Strategic Pivot
As noted here, Meta executives are considering cutting as much as 30% of the budget for the company’s metaverse group, as part of a shift in resources toward AI, and that since early 2021 the Reality Labs division has lost over $70 billion. That same report notes that Reality Labs’ portfolio includes the Horizon Worlds virtual environment and Quest hardware, and that investors have questioned whether the metaverse spending has been worth it. Now, the company is tilting its capital plan toward data centers, cloud contracts and AI talent, and integrating artificial intelligence features across its existing apps, where users already spend time and money.
The story has shifted from inevitable platform takeover to a narrower, more experimental track.
The Lessons: Rails Without Use Cases, Tech Without Behavior
Taken together, the PYMNTS research, Webster’s column and the latest Reality Labs numbers point to several clear lessons for payments and commerce.
First, innovation cannot outrun behavior for long. The metaverse asked people to change how they socialized, worked and shopped. Most chose to keep using familiar mobile and web experiences instead. The app economy and connected devices already offer that convergence of physical and digital channels without asking users to become avatars.
Second, billions were spent to build rails that consumers did not use at scale. The infrastructure that mattered was not the VR headset or the virtual land parcel. It was the ability to move value seamlessly across environments where people actually transact. PYMNTS’ metaverse playbook stressed interoperable wallets, cross platform payments and flexible integration for a reason. Those principles apply just as well to digital wallets, instant payouts and embedded finance in the real world as they do to any virtual world.
Finally, data has proved more durable than the devices. The most valuable outputs of early metaverse and gaming experiments are, arguably, the behavioral insights that can inform better payment experiences elsewhere. The lesson from the metaverse is not that bold ideas are risky, but that even bold ideas must start from where people already live and pay.
