Payments in the Upside Down (the strange thing that happened to payments in the metaverse)

• Payments were built for a world where buying was either in-person or online, but modern buying has blurred the lines.
• The metaverse didn’t change how people pay, but it did expose a deeper issue: payment systems are still using old assumptions to interpret new, layered experiences.
• The real question now is what it means to be “present”?
• Full disclosure: you don’t need to have seen Stranger Things for this to make sense, and there are no spoilers, we promise.

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One is a globally adored sci-fi TV show, one is infrastructure, and one was a vision for the future of digital interaction that didn’t quite land.

So, what’s the link?

Well, all three deal with the same underlying problem: familiar systems operating in environments where the rules have changed.

(And if you haven’t watched Stranger Things, that’s literally all you need to know).

It’s easiest to see if we put it like this...

In Stranger Things, the Upside Down is unsettling because it mirrors the real world, yet behaves according to a different set of rules. The places are recognizable, but the characters don’t yet understand how the environment works, or which assumptions no longer apply.

Payments are starting to feel similar.

The flows look familiar. The signals are the same ones the industry has relied on for decades, but increasingly, those signals behave differently once they’re used in modern buying experiences. Payment systems recognize the transaction, but don’t fully understand the environment it’s happening in, or which assumptions about presence, risk, and intent still hold.

The metaverse sits at the center of this story because it exposed those mismatches.  In many ways, it even acted like the  Upside Down in this analogy. That’s because it forced the industry to imagine buying environments that didn’t fit neatly into “in-person” or “online.” Even as the original vision evolved, the questions it raised didn’t disappear, they simply moved into more practical, real-world forms.

Let’s call it "The Upside Down moment for payments." aka: a familiar world behaving in unfamiliar ways, and if you work in payments, that matters more than it might seem.

Because once buying experiences stop fitting neatly into "in-person" or "online," a much harder question appears: what does it actually mean to be present?

And to understand why, we need to rewind a bit, back  to how the metaverse idea changed once it met the real world...

The original metaverse vision was bold and highly visual, containing fully virtual worlds and avatars, essentially entirely digital environments where people would work, shop, and socialize without reference to the physical world.

However, that version of the future, well, it didn’t quite land the way they hoped.

See, what did emerge was something far more practical, (and arguably more disruptive). Instead of pulling people out of the real world, digital experiences moved closer to it. They started to sit alongside physical commerce, as opposed to replacing it.

You can see this clearly in technologies like Apple Vision Pro, where spatial interfaces let people explore products in immersive ways, but still buy physical goods. You see it in augmented-reality furniture placement, where shoppers want to understand scale and fit in their own homes before committing, as well as AR try-on from platforms like Snap.

Even earlier experiments followed the same pattern. Google Glass struggled as a consumer device, but found real traction in factories as a way to operate within it more effectively.

As Victor Padee put it:

That evolution matters, because it set up the strange thing that happened to payments, which is where the real story begins...

Payments were built for a world with clear boundaries, as in, you were either physically present or you weren’t; you were in person or remote; card-present or card-not-present.

Those distinctions made sense when buying journeys were easy to separate. They become harder to apply when digital interaction sits directly inside the moment of purchase.

In layered buying experiences, the product is physical and the environment is real, but the interaction that leads to payment is digital. Customers make decisions through screens, lenses, or overlays that guide them right up to checkout.

From the system’s point of view, the transaction still looks remote, yet from the customer’s point of view, it happens right there, in context.

And that’s the gap where friction begins to appear...

This is where the conversation starts to become a little…philosophical.

In modern buying environments, “presence” is no longer purely about location. It’s about assurance: how confident the system is about who is acting, how, and with what intent.

Adam Myers explained it this way:

Biometrics, devices, and contextual signals can now provide stronger evidence than traditional checkouts ever did. Yet many payment decisions are still judged using categories designed decades ago.

Victor expands on this...

In Stranger Things, there’s a moment when the characters realize the signals they’re reading are familiar, but the meanings behind them have changed, (if you’ve watched the show, you’ll recognize this as ‘the alphabet wall’). The lights still work, electricity still flows, but the environment alters how those signals behave. So instead of assuming nothing has changed, they rethink how to interpret them.

In payments, the “categories” we rely on - card-present and card-not-present - are the labels payment systems use to decide how a transaction should be treated. They drive risk models, fees, and liability. But they’re now being used to interpret buying environments where familiar signals - user action, intent, authentication - don’t behave the way they used to.

The question is whether they’re still the right lens for understanding what’s actually happening at the moment of purchase?

This is why so much effort has gone into increasing assurance within existing frameworks and why many solutions focus on finding ways to treat card-not-present transactions as if they were card-present, instead of questioning whether those labels are still fit for purpose.

As Victor says:

To be clear, the metaverse didn’t exactly create this pressure, although it did make it visible. It forced the industry to confront the fact that buying moments can now feel close, deliberate, and highly assured, while still being judged as remote.

That tension is what keeps card-present and card-not-present at the center of the debate.

Faced with that tension, the industry has been finding ways to make existing frameworks stretch a little further. Let’s look at how...

How the industry is coping today

So if the buying environment has changed, why does payments still keep trying to force everything back into two card-present, card-not-present buckets?

The answer is simple, it’s because most of the response so far has been pragmatic opposed to revolutionary.

Rather than redefining what “present” means, the industry has focused on increasing assurance inside existing categories, finding ways to make remote transactions qualify for card-present treatment.

That’s where bridge technologies come in.

Chip-over-internet (COI) is one example. It adds a physical step to a digital journey, creating stronger signals around identity and intent. The transaction may still begin remotely, but it’s framed in a way that aligns more closely with card-present expectations.

And the fact that this works is revealing.

It shows where effort is being spent: on adapting behavior to fit them, opposed to changing the definitions. Economics plays a role here too, as gently changing how a transaction is treated can lower costs, simplify liability, and reduce risk.

In the short term, these approaches make sense. They let new buying experiences scale without forcing immediate change across heavily regulated systems.

But they also raise an unavoidable question.

Are these bridges temporary, or are they signs that existing categories are reaching their limits?

And this is exactly why the metaverse remains such a useful reference point in this discussion, because it was the first moment the industry seriously confronted buying environments that didn’t behave like either traditional in-person or online commerce. It surfaced questions around presence and classification that haven’t gone away, as they’ve just moved into more practical forms.

The Upside Down moment for payments (and what this means for the future)

Layered commerce is the reality payments now operate within.

Agent-driven commerce introduces new questions about intent and responsibility. A growing mix of payment rails adds complexity behind the scenes. Context keeps expanding, even as buying experiences feel simpler on the surface.

As Victor says:

That question sits uncomfortably inside today’s frameworks and that discomfort is the point.

In Stranger Things, the Upside Down runs alongside the real world. The places are recognizable, but the rules behave differently. Progress only comes once characters stop relying on what used to work and start paying attention to how the environment actually functions, which is exactly where we’re at with payments.

Digital interaction now sits directly inside physical commerce. Assurance can be high even when presence isn’t physical. Long-standing categories are being stretched by experiences they were never designed to describe.

And the metaverse is the very thing that exposed the questions. That’s why they’re linked. That’s why these questions matter.

And the one that matters most is still open...

When buying no longer fits neatly into “in-person” or “online,” what does it really mean to be present and how long can payments keep avoiding that question?

Ready to explore how payments can operate across layered worlds? Let’s talk about what interpreting “presence” really looks like across your merchant network.