There will be Fintech in the Metaverse

Apple’s new device isn't the Metaverse, it is a window into the coming metaverses.

Jul 28, 2023

Dateline: Woking, 28th July 2023.

Now that Apple has entered the virtual reality (VR) and augmented reality (AR) field with its Vision Pro headset, I think we can begin to see how the metaverses are going to permeate everyday life in the not-too-distant future. I have a feeling that Apple’s launch of the Vision Pro headset, rather than Meta’s acquisition of Oculus, will in time be seen as the cusp for the next generation of computing, just as the iPhone was the end of the PC era and the beginning of the smartphone era, because the Meta headset replaces the games console whereas the Apple headset replaces the computer.

Vision

Many observers were taken aback by the $3,499 launch price of the Apple’s new Vision Pro headset, especially when set against the $500 price of Meta’s Oculus, but it’s not really that expensive in historical context. It’s less expensive in real terms than the IBM PC was when it launched or the Macintosh was when it launched and I am sure that there are plenty of people who will buy one to begin experimenting with it.

I will be one of those early adopters despite the price. After all, I remember showing up in San Francisco in the early 1980s and going to a downtown store — somewhere around Embarcadero if memory serves — to buy an Apple IIe. It cost around $2,500 back then and I thought it was the most amazing piece of technology in the world. I installed a modem and bought a ProDos 5Mb external hard drive and felt like I was NASA, although I never used it for rocket science.

San Francisco in 1983 (when you were still allowed to smoke at your desk!)

What I did use my amazing new personal computer for was to play some games, of course, and to write a series of role playing game scenarios for D&D and Runequest. But mostly I used it for a variety of hacking experiments with a friend of mine. I remember we ran a serial cable out of a window and down to the floor below, so that we could write in C on the IIe and then load the compiled 6502 assembly code on to another machine. That sort of thing. The transformational impact, though, came through communications.

The addition of a modem was transformational in two ways. First of all, it meant that I could get dial-in access to machine I was working on in my day job. I can still remember the frisson of excitement when I realised I could access the dial-in port that the manufacturer used in order use my machine at home as a terminal (these were the days before windows, kids, and it was a command line in those days) to access the machine in the office (a Data General MV, if anyone remembers those).

(I wish I’d recorded my first day working at home in my diary so that I could celebrate the 50th anniversary, but it was probably sometime in the fall of 1984).

Secondly, it meant that I began my early ventures into cyberspace with bulletin boards and Compuserve (I was 10014,3342). I hardly need to point out just how that worked out. I’ve been unable to determine whether Steve Jobs actually ever did say that the devices should have been called personal communicators rather than personal computers, but that’s indeed what they ended up bring used for.

Window

I think I’m way past my coding years so I doubt I’ll be using C++ or whatever the kids are into these days to build anything on Apple’s VisionOS, but I will almost certainly end up using the headset for something I don’t even think about now, so even at that launch price Apple are going to change the way we look at, and through, computers. Hence it is reasonable to be optimistic about the device (one report says it could follow the trajectory of the AirPods, whose shipments roughly doubled in size each year between 2017—their first full year on the market—and 2020) and think about it, as Benedict Evans says, as more like the first Macintosh, which was more than $7,000 at today’s prices it launched and most people didn’t know why they needed one.

Indeed, one early reviewer said that his demo of Vision Pro was "the most mind-blowing moment of my 14-year career" covering the technology scene, which is a good description of how I felt when then Macintosh came out. I went with a friend of mine who wanted to buy one and we unboxed and fired it up. Wow. Using MacPaint for the first time was visceral shock, the dawn of the graphical interface. Perhaps the Vision Pro is the dawn of the post-graphical, immersive era. The era of the spatial computer, which brings us to AR/VR and the metaverses of our shared future.

AR is about changing the user’s perception of their environment (remember Google Glass notifications?) which Apple do by placing 2D displays into environment so that they appear be there in your current environment. (I can’t wait until this is built in to CarPlay so I can drive while wearing the headset and have my personal HUD).

VR is about immersing the user in a virtual environment. The way that Apple have implemented the mundane world as one mode among many that the user can switch between in a proto-teleportation system is, by all accounts, a revelation.

If there is a role for AR/VR then, it is as applications that run on a spatial computer and that line of thinking suggests to me at least that the best use cases will be in contexts where the shared social space is key, giving value to VR, or in complex environments (eg, brain surgery or buying a U.K. train ticket) where the value that digital overlays bring via AR is high.

Demand

Are the customers demanding financial services in this emerging environment. I wouldn’t think so. As Mike Storiale, VP for innovation development at Synchrony Financial Services points out, Palm Pilot users were not calling for a Blackberry, and Blackberry users were not dreaming about an iPhone. As he says, “the metaverse is chaotic now” but goes to suggest that’s not a bad thing as companies are exploring what they can do in it now as well as beginning to think about their longer-term strategies in the field.

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The trajectory is what matters. Given that there will be business in some of the metaverses, there will necessarily be banking and financial services. Deloitte say that the metaverse is the next big wave to hit and, as Richard Turrin puts it, the end game for every new technology and business model banks have “crammed down their throats”.

Where does fintech come into these strategies? Well, financial institutions could develop new payment methods for the metaverse, such as consumer-focused wallets similar to those used for e-commerce, but with web3 at their heart. This approach would make consumer transactions as well as peer-to-peer payments easier, while maintaining the security and lower transaction costs that will make the metaverses more appealing transaction spaces, so fintechs could focus there. In addition to digital money, of course, the metaverses need digital identity to move beyond being mere virtual worlds and here, as Tracey Follows in Forbes, Vision Pro uses biometrics in such a way as to cement the relationship between the user, the platform, their identity (and, in time, those wallets) but using iris biometrics, an obvious step up from FaceID. This would mean that the ability to present verifiable credentials bound to the user would become a natural and inherent part of interactions in metaverses accessed through the Apple device. Very cool, if you ask me: Pop on the headset and pop in to PornHut (or whatever the 3D version will be called) and the system will automatically check for and authenticate an IS-OVER-18 and IS-A-PERSON credentials and accept the necessary payments in tokens with no need to dip out into the banking system.

Eco-Friendly

I tend to think, as the Financial Times notes, that the Vision Pro is a "statement of intent rather than an end in itself”. It might be a few years before quantum computer contact lenses or biocomputer brain implants replace the headsets, cables and batteries but by that time Apple’s developer ecosystem will already have the applications that none of us knew that we wanted and all of us will naturally switch between the universe and the metaverses multiple times every day without even thinking about.