Our sound-based payment tech helps those not digitally savvy: ToneTag CEO

'We are already doing 10 billion UPI transactions a month which is way more than the digital transactions in the US and Europe combined (for a month),' said Abhishek

Launched in 2013, ToneTag uses sound waves to enable contactless, offline and proximity data communication across devices. It claims to be the largest sound-wave communication technology platform in the world and has won the Reserve Bank of India’s hackathon twice over. KUMAR ABHISHEK, co-founder and chief executive officer of ToneTag, spoke with Raghu Mohan in a video interview. Edited excerpts:

At the outset, why did you opt for a sound-based payment system?
 

The idea was to use a protocol which can allow people who are not digitally savvy to have a very idiot-proof way of using financial services, an analog protocol as ubiquitous as your voice. For customers who are savvy, this platform will improve their experience multifold. Instead of fumbling with an app, you are speaking and a payment gets done. The differentiation is in the experience. People keep asking 'Hey, what would be the next experience which the customer is going to get?’ And we say ‘a shift towards being more natural’. To speak, you don’t have to learn anything.
 

For the benefit of our readers, can you tell us how this will work when you order a cup of coffee?
 

A customer has to open one of the apps where we are present, and just has to say, ‘Order one cappuccino from Blue Tokai’, and give an address. It will prompt you back, ‘OK, ordering a cappuccino for Rs 180’. And ‘Shall I go ahead and process this?’ And you say 'Yes’ and the payment is done. At the back end, if it’s a wallet-based transaction like Amazon Pay, then you don’t need additional authentication, but if it is UPI, then it will prompt you to enter the pin, but that’s about it. This is when you are not at the store. But say, you are right now at Blue Tokai. The app will decode and understand where you are and you will then be presented with a store menu (without scanning). If you already know what you want to buy, then you don’t need a menu. We support 14 languages. We are today serving more than 30 million interactions a month.
 

What are the network issues involved in all of this?
 

We are already doing 10 billion UPI transactions a month which is way more than the digital transactions in the US and Europe combined (for a month). And this is only going to increase. What’s happening is that you are doing these Rs 10 and Rs 20 transactions and it’s going through four hops, bringing to the fore issues on the infrastructure side. A great step would be if I can batch these transactions when they hit the server.
 

What it means is that I can independently process some of these transactions at the client level itself. And when you are doing this, you also need to ensure that the merchant or whoever you are paying to in proximity, is able to know that this transaction has happened without you really hitting the server. So, from your phone, it can go to the merchant’s device without going through the servers. NFC (near-field communication) does this. Our ToneTag audio-tech can also do it in the very much the same secure fashion. The only difference we bring is that NFC requires a chip on both sides which is largely controlled by the OEMs (original equipment manufacturer) of the mobile makers. But for Google, Amazon, Paytm, PhonePe to give a similar experience to their customer, they need an interoperable proximity technology and that’s where we come in. And gradually as we see more digital payments, especially CBDC (Central Bank Digital Currency), its success depends on the ability to work offline, and to make it work, you need proximity tech.
 

How has it been for ToneTag after winning the Reserve Bank of India’s hackathon twice over?
 

What HARBINGER (the hackathon) does for companies like us is that it helps us present a solution to large-scale issues which the regulator is seeing. And global regulators are also going to pay attention to it. Some of these problems are brought in the HARBINGER and we got a chance to present our solutions for them.
 

It has brought confidence to the ecosystem about the technology which we bring. And some of these, while it is going to solve the problems which the regulator is seeing, will also strengthen the financial institutions of the country, in how they approach these problems. So, for example, 'Hey, can I pay if I don’t have a mobile phone? And we gave a solution and it was really appreciated. You know, it can be a global product stack coming from India – contextual-based commerce and payments – and for low-value transactions without a mobile phone. The industry has noticed us and we are now scaling this up.