Payments Innovation

Does Commerce Have A Role To Play In Virtual Reality?

Vantiv VR/AR Commerce

Virtual reality (VR) and augmented reality (AR) are the latest buzz phrases popping up across a wide array of industries and use cases, but is there truly a place for these new technologies in commerce? Matt Ozvat, head of developer integrations at Vantiv, joined Karen Webster to discuss how the new channel of VR/AR is opening up new opportunities for both eCommerce and retail.

Virtual reality (VR) and augmented reality (AR) are two of the latest buzz phrases making headlines and gaining interest in a variety of industries. Though the technologies still haven’t reached a level of mainstream usage or acceptance, that hasn’t slowed down the number of companies and sectors looking to utilize VR/AR to transform customer experiences.

Just this month, Hollywood film director Steven Spielberg and several major studios fueled Series A funding for Dreamscape Immersive, a new VR technology startup aimed at VR entertainment experiences that bring consumers into larger social and retail environments.

Meanwhile, major retailer Best Buy recently announced it would close at least 200 of the 500 Oculus pop-ups in its store locations across the country due to low interest in consumers requesting VR demos.

Matt Ozvat, head of developer integrations at Vantiv, and Josh Mather, technology evangelist at Vantiv, whose Vantiv O.N.E. developer experience includes a virtual reality and augmented reality community, both agreed that now is the time when the adoption of VR/AR is starting to gain traction as consumers begin to find new use cases for the technologies whose potential they didn’t fully realize before.

The VR/AR Commerce Play

It’s easy to associate VR and AR solely with video gaming and oversized 3D headsets, but companies are working to apply these evolving technologies to more immersive experiences in support of commerce.

As the hardware associated with these technologies comes to fruition, Mather explained that the cost will decrease, which will drive revenue in the space going forward.

He also noted that a lot of traction has been made with AR in the retail space, with merchants like Lowe’s and Wayfair using the technology to enable consumers to virtually see furniture in their homes prior to purchase. From there, the purchase is completed either via eCommerce or by going to the store and doing a card-present transaction.

Ozvat agreed that cost has been a major barrier for those outside of the gaming industry in accepting VR/AR technology; however, as price points continue to drop over time, more mainstream adoption is expected to rise.

“Think back to the mid-1990s — cell phones were really expensive, and not everyone had them yet. When they came down in price, they became ubiquitous,” he explained. Ozvat added that now is the time for eCommerce players to begin heavily looking into their own adoption of VR/AR in preparation for the considerable adoption by consumers that is expected as prices continue to drop.

It’s also a time when tech giants are stepping up to create a potential access point or operating layer for consumers wanting to reach the VR/AR world.

In the same way that Amazon’s Alexa operating system and Facebook’s Messenger platform are enabling commerce experiences for consumers, there’s the potential for other proxy technologies to emerge that will act in the same way for VR/AR.

Whether it’s tech giants like Samsung or Apple or even mediums like Netflix or YouTube, companies are vying to become a hub or connection point for triggering commerce via VR/AR technologies.

“Somebody is trying to drive an underlying agnostic layer so that you aren’t talking to Alexa or Cortana, because, at the end of the day, you don't want to remember all these virtual names — you want to be able to just operate in your world,” Mather pointed out. “In the same way, we want to do that in payments, access an agnostic player and have a seamless omnichannel tokenization mechanism in the back end for those types of activities.”

Banking On The Customer Experience

Online furniture retailer Wayfair has created a use case for AR in its mobile app that is conducive to making consumer buying experiences better, Ozvat noted.

Wayfair’s View in Room feature lets users upload pictures of their own rooms and place Wayfair decor in those images to get a 2D rendering of how it might look. This practical use case assists consumers in the process because they can visualize products in their room without having to use a VR headset — all they need is their mobile phone.

“We are seeing an uptake on developers that are much more interested in providing easier, faster, simpler buying experiences,” Ozvat explained.

“I think you’re going to see a ton more of those same augmented apps for closed-loop merchants to be able to have their merchant app become more important now,” he said. “You're going to walk into whatever store that has their app, and the merchant is going to start providing new value of augmented reality through it.”

Mobile apps may just be a new way for merchants to help create customer loyalty and stickiness using AR technology, while also helping drive adoption of the technology with consumers.

For merchants that are using virtual reality to provide consumers with a fully immersive experience of virtually being in a retail store, eCommerce point-of-sale developers are creating technology that enables virtual inventory control.

“Merchants, small and medium-sized business (SMBs) especially, aren’t going to hire a computer scientist to help maintain their virtual inventory, so there has to be a very easy way to provide it,” Ozvat said.

Providing a successful and seamless VR commerce experience is a functionality that will become a requirement for merchants as they continue to support VR/AR technologies.

A Paymentless Future

As payments continue to evolve, both in and around VR/AR technologies, Ozvat said he envisions a future where a consumer will not even have to pull out their credit card, mobile device or wallet to complete a transaction.

With the increasing number of eCommerce use cases and transactions, consumers are more willing to store their payment credentials in eCommerce environments, which will help proliferate what Ozvat describes as the paymentless experience.

He explained that, once payment card data is available and secured within an eCommerce environment, technology offerings like Vantiv’s OmniToken solution will allow for that payment mechanism to be leveraged for both card-present and eCommerce transactions, essentially creating a frictionless way for consumers to transact across a variety of channels.

In the same way that the shift to EMV resulted in the industry having to learn and adapt to new opportunities, Ozvat said the emergence of paymentless experiences is yet another way to make transactions even simpler by allowing consumers to bypass the traditional payment experience altogether.

Taking a look into the near future, even five years from now, the conversation surrounding VR/AR in commerce may look very different from how it looks today. The market for the virtual world is estimated to grow incredibly, into the hundreds of billions of dollars over the next five to 10 years.

“It’s going to proliferate through multiple verticals, and that’s where seamless payments happen,” Mather noted.

Ozvat is confident that the push toward invisible payments is one that will continue going forward as merchants seek to find more opportunities to provide fast and frictionless transactions to their consumers.

“Removing cards and wallets altogether from the [payment] experience is something to keep always on your horizon. These new concepts of eCommerce, AR/VR and whatever crazy technology comes next will all be focused around making it so easy to buy,” he said.

Conceptualizing and designing VR/AR consumer experience solutions are at the heart of the Virtual 2 Reality Challenge coming up at the Innovation Project next month.



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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