"VR Pay is developed based on Alipay's security technologies and backend capacities," Lin Feng, senior technology expert in charge of F Lab, one of Ant Financial's incubators, told CNBC on Thursday by email. "When users need to complete payments within different VR use cases, [they] can use their Alipay accounts."
Alipay is one of China's largest online payments systems, with over 450 million active users.
The VR space is expected to see a rapid uptake in the next few years, with the introduction of several new VR headsets this year including Google's Daydream VR and Sony's PlayStation VR.
Spending on VR headsets is expected to reach as much as $7.9 billion by 2020, according to data analytics firm IHS Markit.
The payment process on VR Pay involves two steps: first, users log in to their account in order to verify their identities; then they are required to enter a password to confirm the payment.
User identity authentication can be done using voice print technology, which can recognize individual voices of users, or by logging into the account through the smartphone and then syncing it to the VR handset.
To confirm payment, a password has to be entered and it can be done in three ways: first, by tapping onto a touch pad, like the one found on Samsung Gear VR headsets; second by nodding one's head, and lastly by staring at different numbers on the VR display screen for a few seconds.