ToneTag bets sound waves will power next generation of digital payments

Bengaluru-based ToneTag processes over $3 billion a month using sound wave technology, enabling secure, cardless payments in India and emerging markets while expanding globally

ToneTag, a deeptech firm, is betting that sound waves—not cards or apps—will define the next era of digital commerce in emerging markets.

 

ToneTag has built a proprietary protocol that uses audio frequencies to transmit encrypted payment data between devices, eliminating the need for Bluetooth pairing, near-field communication chips or even internet connectivity during the transaction itself. The Bengaluru-based company now processes roughly 25 million transactions daily, worth more than $3 billion monthly, as countries including Indonesia and Brazil look to reduce dependence on Western card networks.

 

"The real differentiation will happen at the edge," Kumar Abhishek, ToneTag's chief executive and co-founder, told Business Standard.

 

India's digital payments market has exploded, with Unified Payments Interface (UPI) crossing almost 17 billion transactions monthly.

 

“The next phase of computing is conversational,” Abhishek said. “If people can interact with systems the same way they interact with other humans—by speaking—access to computing expands dramatically. That's where the next billion users come from.”

 

ToneTag, backed by investors including Amazon and Reliance Capital, has built a communication protocol similar to Bluetooth or Near Field Communication but one that transfers data over sound waves. The protocol is protected by patents across the U.S., Japan, India, Southeast Asia and Dubai.

 

Unlike Bluetooth, Wi-Fi or NFC, sound-based communication requires no pairing, tapping or special hardware. It works with speakers and microphones already in virtually every phone and most acceptance devices. The simplicity reduces friction and improves accessibility, especially where digital payments are a basic utility.

 

Abhishek envisions users wearing smart glasses completing secure transactions without opening an app. “You could simply look at a QR code and say, 'Pay ₹500' and everything happens seamlessly,” he said.

 

As payments migrate from plastic cards to mobile apps, the industry lacks a communication layer matching the reach and reliability of card networks, Abhishek said. Two key challenges exist: enabling mobile apps to work with billions of existing card terminals, and extending digital payments to merchants without card infrastructure.

 

“Our deep-tech protocol gives payment apps the same functional capabilities as physical cards,” Abhishek said, allowing them to interface with legacy acceptance systems while reaching merchants who lack traditional point-of-sale machines. The company does this through a proprietary Internet of Things device that supports two-way, sound-based communication with smartphones while remaining internet-connected.

 

Enterprises choose ToneTag for its protocol rather than its hardware, Abhishek said. As payments shift to phones globally, he questions whether expensive POS systems are still needed, arguing that lighter IoT devices can expand merchant acceptance at lower cost. “This is the future we are unlocking,” he said.

 

Global expansion

 

ToneTag's network now processes about 25 million transactions a day, representing roughly $110 million to $120 million in daily value, or more than $3 billion a month. The platform spans nearly two million touchpoints and is beginning to scale beyond India, with Indonesia as its first international market and additional expansion across Southeast Asia planned over the next several quarters. Some other markets it is targeting include Australia and Brazil.

 

“On profitability, we are currently in our sixth consecutive quarter of profitability. We operate at roughly a 25 per cent PAT margin,” said Abhishek. “We expect to close this year with north of $50 million in ARR. We have also recently completed a significant capital raise, which means we are well capitalised and flush with cash.”

 

The company manufactures all of its devices in India and positions them as premium products, contrasting with low-cost soundboxes imported from China. Abhishek said enterprises are willing to pay more because the value created by its technology outweighs the price difference.

 

“If a merchant wants to use only a phone, they can do that,” said Abhishek. “If an airline crew member wants to collect in-flight payments using a phone, that's also possible. A POS device isn't mandatory.”

 

Competition

 

Abhishek views the ecosystem as collaborative rather than competitive, partnering with sound box manufacturers and payment companies, including Paytm, PhonePe, and Google Pay, to expand functionality and adoption.

 

ToneTag is focused on leveraging its alliances with global brands such as MasterCard, Verifone, and Finacle as it expects to have reached 100 million customers by the end of this quarter. The company's technology is running live with major brands like Airtel, Freecharge, Amazon Pay, YesBank, ICICI Pockets, and Bank of Baroda.

 

The company has made over 3.1 million merchant devices contactless, and leading ATM manufacturers like Diebold, Hitachi, and NCR now support sound-based cash withdrawals.

 

Opportunity

 

India's digital payments market reached $6.83 billion in 2025 and is forecast to hit $33.5 billion by 2034 at a 16.1 per cent CAGR, fuelled by UPI and QR codes, according to industry estimates.

 

Abhishek said many countries want to reduce dependence on card networks and build their own domestic payment infrastructure. “This creates a large global opportunity. We see ourselves as a deep-tech company built in India for the world, and we have already started on that journey,” he said.