Meta's Orion and post-device payments
Do form factors even matter when they change so quickly?
Disclaimer: views expressed here are my own and do not represent any other organisation
In Meta’s Payments Potential, I discussed how Meta could do more with payments. They are building a hardware portfolio and have three of the most popular apps on earth (Facebook, WhatsApp, and Instagram). An Apple Pay-esque payment system across apps and devices could add to Meta’s top-line revenue in the same way that Apple Pay generates 1% of Apple’s total revenue. Not a bad option considering 98% of Meta’s revenue today comes from advertising sales.
The other key element discussed in the article was form factors.
The Meta Ray-Bans have been a moderate success, likewise the Meta Quest 3 VR headset, but neither has payment functionality like the Apple Vision Pro. Optic ID allows payment authentication when wearing the device, much like FaceID on an iPhone. I contended that over time, form factors will converge, and it will become possible to pay with a pair of Meta Ray-Bans, but not any time soon:
If Meta were to develop a payment solution with biometrics, ideally, it would exist within products such as the Ray-Ban smart glasses. But it’s not likely that biometric technology can work within a standard-sized pair of sunglasses, or anything close to it. And form factors will not reduce in size as quickly as many consumers, and tech companies themselves, would like.
However, in the long-term form factors will converge. Meta Pay, sitting across all of Meta’s devices will be a long-term play to build a cross-platform comprehensive payments wallet.
Realistically, payments will function within form factors that successfully capture market share. This may mean that Apple Pay on an iPhone will remain the best payment experience for many consumers, at least for a time. But recently Meta has taken another step to make the glasses form factor even more interesting.
Orion prototype unveiling
Last week, Meta unveiled a prototype of their AR (Augmented Reality) glasses, currently called Orion. They are not available to buy yet, nor anytime soon. Therefore, showing off a prototype at such a public event comes with risks. Meta will now be under pressure to ship by Q4 2025. And there was no sign of a potential price point.
Meta’s challenge will not just be shipping Orion, but shipping with a price point that appeals to enough consumers to make it worthwhile. There has been talk that the prototype models of Orion cost $10,000 each to build right now, so the final product that hits the shelves may be somewhat different to what was shown last week.
This has been one of Apple’s challenges with the Vision Pro. Considering the launch itself and everything since, Apple Vision Pro has been the least successful Apple product I can remember, mainly due to the price point. $3,500 is a lot of money for anyone.
Apple doesn’t usually unveil prototypes. They won’t show the public something that is so far from actually launching. But if Orion does get delayed, there’s a risk that Apple will get to market with something similar first, as noted by Ben Thompson in Stratechery:
I assume that Apple is working on its own glasses project; the company should absolutely redouble efforts here with the goal of beating Meta to market. That certainly seems like a reasonable bet, given Apple’s long-demonstrated expertise at manufacturing high-precision devices at scale; Meta’s challenges here are considerable, both in absolute terms — making Orion will be really hard! — and in relative terms, given the company’s relative dearth of experience in making high-end consumer electronics at scale.
For the journalists who got to test Orion, albeit in a controlled environment, the feedback was overwhelmingly positive. From Scott Stein at CNET:
These moments all felt like a drift into a strange new future, even for me, having been immersed in AR and VR for years. That's because Meta's early prototype hardware, not remotely ready for the public yet, is a fusion of technologies I've seen in other places and some I've only barely tried at all. Still, everything also felt familiar.
In a lengthy write-up, Alex Heath at The Verge noted the quality of the display:
The quality of Orion’s display is surprisingly good given the form factor. Video calls look crisp enough to feel engaging, and I had no problem reading text on a webpage that was several feet away.
These glasses are not part of the Meta Ray-Bans product line so far. Whether they will be or not may depend on the final form factor. I would expect that for them to get the Ray-Ban brand affixed, they’ll need to look like standard glasses, and the prototype, despite looking good, is chunkier than current Ray-Ban designs. That said, if the final product for the retail market matches the hype of the prototype, then Ray-Ban may see value in associating with Meta’s AR glasses, even if they don’t look quite as good as your typical Ray-Bans.
Recently, Ray-Ban’s parent company, EssilorLuxottica, announced a long-term partnership with Meta, which can help one area in which Meta does struggle. Meta has no retail stores, which means hardware distribution can be more of a challenge, at least compared to Apple. With a device so groundbreaking, the ability to try Orion in-store could make all the difference, and this is where the partnership can make a lot of sense. As form factors evolve, some consumers will want to try before they buy.
The form factors of the future?
Part of the challenge in reading anything about Orion and explanations of how great it feels to use, is that you cannot appreciate it until you’ve used it yourself.
This is also the case with Meta Quest (or any similar VR device), Meta’s Ray-Bans, and the Apple Vision Pro (which I still haven’t tried). This is the problem with any new, semi-immersive device. Until you’ve experienced it, it’s hard to imagine how good it can be.
Yet, even though consumer adoption of these new form factors will rely on word of mouth and curiosity, innovation in form factors coupled with developments in AI will bring about a big change in the tech we all use.
Since the launch of the iPad in 2012, the main consumer devices1 have been, for most users, 2 or 3 of the following, or at least something close to:
Smartphone (iPhone)
Tablet (iPad)
Laptop (Macbook)
If we fast forward ten years into the future. I can’t say with any confidence what devices we will be using day-to-day. Will we still be using an iPhone? Smart glasses? Or perhaps this will be replaced with a small device, that doesn’t yet exist, focused on interacting with AI in a way we can’t yet foresee?
The FT reported last September, that Apple’s ex-design guru Johnny Ive is working with Open AI to develop a new breed of device. There hasn’t been any further news on this since then, but it does seem an intriguing proposition:
OpenAI is in advanced talks with former Apple designer Sir Jony Ive and SoftBank’s Masayoshi Son to launch a venture to build the “iPhone of artificial intelligence”, fuelled by more than $1bn in funding from the Japanese conglomerate.
Sam Altman, OpenAI’s chief, has tapped Ive’s company LoveFrom, which the designer founded when he left Apple in 2019, to develop the ChatGPT creator’s first consumer device, according to three people familiar with the plan.
Altman and Ive have held brainstorming sessions at the designer’s San Francisco studio about what a new consumer product centred on OpenAI’s technology would look like, the people said.
They hope to create a more natural and intuitive user experience for interacting with AI, in the way that the iPhone’s innovations in touchscreen computing unleashed the mass-market potential of the mobile internet.
I’ve heard others speculate that next-generation VR devices may make sense for entertainment in the home and next-generation smart glasses may be an ideal form factor on the go.2 The one strength of smart glasses is that for those who actually wear glasses with prescription lenses, they can look quite inconspicuous. But for those who don’t wear glasses every day, outside of the summer months, they may look somewhat strange.
We may be entering an era where the dominance of a small number of devices comes to an end. For a time, the smartphone, tablet, and laptop were the definitive device types, and any attempt to build something else failed.3 Interacting with AI may now be more important than the device types themselves, allowing for a wider variety of devices and platforms than we’ve seen in the past decade. The constraint will be the need for computing power on device to handle AI, yet as Moore’s Law continues, the possible device size that can handle most functions needed to interact with AI will decrease.
Post-device payments
I wrote back in July 2023 on the topic of how software is disrupting payments. For many decades, card payments tookplace via a Point of Sale machine like those made by Verifone and Ingenico. It wasn’t too long ago that the same few card payment machines were seen in most countries, or at least they all looked very similar.
Eventually, we got e-commerce payments, and with technology such as tokenisation, the buzzword in payments was soon multi-channel, or even omnichannel. The idea that users could see their transactions, whether in a retail store or online, in one place and through a single source, was exciting for a while. Soon it became table stakes for payments businesses.
E-commerce has modernised with API’s and easy integrations becoming the norm, whilst, in the card present environment, we’ve had an emergence of new payment devices. In parts of London, such as Seven Dials near Covent Garden, devices from Sum Up or Square can be seen in many stores. In the Apple shop, checkout is completed on Tap to Pay on iPhone, which is essentially SoftPOS on iOS. Supermarkets are now mostly self-checkout, with a small payment device next to the self-scan machines. Revolut and Adyen have both launched their own in-house developed payment devices in the past year. Hardware isn’t a moat anymore.
Like almost everything else, payments is now software.
Integrations and capabilities matter far more than the physical device itself. The introduction of SoftPOS means that any device with NFC capability can accept contactless payments - at least in theory, subject to PCI rules and regulations.
Companies like Lightspeed offer a cloud-based electronic POS system which operates across all devices. Klarna has announced that they are working with Adyen to offer their BNPL solution in a card-present environment. For a long time, Klarna has been an e-commerce-only proposition. All these examples highlight that now, in payments, the form factor of the device is less impactful than it was not so long ago.
In many markets—Brazil, India, China, Indonesia, and the list goes on — QR codes that link to direct bank payments or mobile wallets are taking the lead. A QR code can be shown on another user’s phone, printed out and laminated, or even shown on a POS device, which can also be used for card payments.
To win in payments these days, adaptability is vital. What I call “post-device” payments means that you can offer a wide range of solutions and options to a user and not be dependent on using a small set of traditional POS devices to present a transaction to a customer. Much like the new direction in consumer tech, software is more important than hardware.
If you enjoyed reading this post, you can connect with me on LinkedIn, X, and BlueSky.
Android equivalents can be substituted for the Apple hardware. I use the term consumer devices, as the success of these form factors has been in their popularity at the consumer level.
They can of course be used by businesses too. When the iPhone first came out in 2007, it wasn’t well supported by corporations, but over time the iPhone’s popularity meant that support for the iPhone at the enterprise level, both in terms of advocacy and at the technical helpdesk level only grew. Now Apple devices are the norm in many corporations.
Meta’s foray in smart glasses has made enough of a splash, that according to The Information, staffers at Google have been exploring opportunities to partner with Samsung in this space. This has been spurred on further by the success of the Orion demo. So far the senior leadership at Google hasn’t fully come onboard.
Samsung and others tried to get attention with the phablet category, but eventually this become considered as a bigger version of a smartphone itself, rather than in a category of its own.