The New Reality: How AR and VR are Transforming Payment Technology

Augmented Reality (AR) and Virtual Reality (VR) are both making waves for retailers as a wholly new way for consumers and brands to interact virtually, which means that technology integration with payments functionality may not be far behind. According to Harvard Business Review, AR and VR technology companies have raised more than $650 million in equity financing in 2015 alone and these two technologies are poised to transform the retail shopping experience as we know it. With that transformation, of course, comes a transformation in payment technology. People need to actually pay for what they’re falling in love with virtually.

Let’s look at both AR and VR and what they could mean for the future of payment technology.

Augmented Reality

One of the factors in online shopping, states Augment, is that customers don’t get a sensory experience similar to when shopping for items in-person. Well, augmented reality is changing the way people shop online, offering a deeper sensory experience than previously available. Any computer or smartphone can become a portal to a brand’s augmented reality experience. It’s this new type of experience that’s making many retailers take note and explore different ways to bring the customer deeper into an online product experience.

Essentially, AR technology allows customers to augment a view of the real world with technology additions. Think about the possibility of trying on a new pair of shoes using your smartphone, or imagining how a sofa would look in your living room by aiming the phone screen at the space prior to making the purchase.

For example, a European toy company has featured AR kiosks in their stores since 2010. Customers can see what a box filled with the toy pieces will look like once assembled, according to Venture Beat.

A well-known furniture retailer offers an AR app through the iTunes store. By downloading the app, customers can see how furniture will look in their home before purchasing it, heightening both product interest and customer experience with the potential to lessen buyer’s remorse when ordering items from a catalog.

Virtual Reality

In July of this year, Chinese e-retailing giant Alibaba announced that it’s bringing virtual reality-powered shopping to the masses via its website. With more than 400 million shoppers, Alibaba is China’s largest retailer to make both the foray into and investment in virtual reality (VR). By the end of 2016, customers from all across the globe could be able to step inside Alibaba’s virtual storefront. Of course, those customers will need hi-tech gear to power their VR shopping experience – Alibaba’s customers are buying in excess of 300,000 units of VR-related gear each month.

By donning a headset, customers are immersed in a virtual shopping environment. They can, with a glance or nod, grab products, rotate them, examine them in greater detail, and in many cases, even add those items to their virtual shopping cart.

Where AR, VR, and the Payments Industry Intersect

“Where Discover sees great opportunity with AR and VR is how they could enhance a customer’s ability to experience shopping and integrate payment functionality seamlessly with the customer journey,” said Soumya Chakrabarty, Director of Payments Innovation at Discover Global Network. “Retailers can deliver a more customized customer experience, and customers can engage with retailers from their homes and control their shopping journey from anywhere, which could drive more meaningful business-to-customer interactions.”

The big win for brands looking to integrate payment technology with AR and VR is a near-seamless brand experience—from product research and experimentation in 2D and 3D to paying for an item and having a product appear in front of the customer in tangible reality. AR and VR, when integrated with payment technology, empower customers to research and shop from beyond the storefront and actually experience products in greater detail than typical 2D online shopping experience.

Just think—customers could see what a sofa looks like in their actual living room, then select that sofa, a payment card, and a delivery date—and all with the nod of a head. Brands could choose to integrate payments into customers AR and VR experiences, creating a full-circle customer experience.

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