Retailing in metaverse: Cryptocurrency and consumer payment choices in virtual reality environments

This research explores the nature of customers' payment method choices in virtual reality (VR) and metaverse retail settings. Cryptocurrency has gained momentum as a customer payment method in the metaverse. Digital wallets like Apple Pay and Google Pay have become the preferred payment methods across multiple retail channels outside the metaverse. Payments are an important customer touchpoint that can lead to attrition and revenue problems for retailers. Thus, retailers must optimize payment technologies for omnichannel retail settings. We study customer payment preferences among credit cards, digital wallets, and cryptocurrency. Using a VR grocery store and online grocery shopping simulation, we explore the impact of an immersive sensory environment. Over three experiments, we find that customers are more likely to choose digital wallets and credit cards (Study 1) over cryptocurrency across both VR and non-VR retail settings. Next, we show that security assurance as educational nudge positively impacts customer willingness to choose cryptocurrency (Study 2) for a digital product in VR, and this effect is mediated by greater trust in cryptocurrency providers and lower perceived volatility of cryptocurrency (Study 3). From a strategy perspective, we build a case for retailers and other stakeholders to build blockchain-based digital wallet capabilities and explore strategic partnerships as metaverse retail evolves and more traditional consumers join it.