A whitepaper published recently by Visa details the company's interest in entering the NFT market on the basis of assessment of the NFT technology's ability as a "promising means for engaging fans."
It was argued in the report that non-fungible tokens had been an important innovation during the pandemic when shelter-in-place orders limited live sports, entertainment, and music festivals.
The emergence of NFTs coincides with an increasing interest among fans in joining digital communities around their favorite artists or sports teams.
Major league sports are estimated to have lost 18 billion dollars due to the COVID-19 pandemic. Consequently, the payment giant disclosed that revenue diversification and technology development are essential for businesses to reposition themselves for growth and to catch the attention of customers.
According to the report, "NFTs appeal to collectors, fans, teams, leagues, and talent." NFTs are particularly suitable for fostering fan engagement, customer relationships, and generating new revenue streams. NFT was used mainly for collectibles, art, and gaming applications
A new generation of NFTs may fuel small and medium-sized enterprises. Start-ups can now reach customers around the world by selling online and taking advantage of the rise of ecommerce. Businesses can produce digital goods through public blockchains and distribute them instantly into cryptocurrency wallets through NFTs.
The whitepaper was revealed alongside Visa's announcement of its $150,000 purchase of CryptoPunk 7610, the first NFT it had purchased. CryptoPunks has 10,000 unique NFTs backed by the Ethereum network as proof of ownership.
The payment company has increasingly focused on digital assets, so Visa's move into NFTs isn't surprising.
In the Asia-Pacific region, the company recently entered into an agreement with digital asset platform Zipmex to facilitate crypto payments.
As part of Visa's ongoing efforts to support the digital asset class, the company announced its intention to build cryptocurrency payment on-ramps using fiat currencies in January.