This fintech start-up uses sound waves to enable payments on any device.
Kumar Abhishek wanted to solve the problem of finding loose change to make small payments. But as he started doing more research, he realised that there was a big gap in the digital payments space.
“When currency or mediums of exchange are involved, universal interoperability and accessibility are crucial. While India has about 800 million phone users, only around 200 million use smartphones. Of these, a mere 6 million phones are NFC-enabled. In such a scenario, a vast majority of 1.3 billion Indians can’t access digital payment systems,” he says.
That’s when he came up with the idea of using sound wave as a medium to transmit data and started ToneTag in late 2013, along with co-founder Vivek Kumar Singh. “ToneTag uses sound waves to enable payments and proximity engagement services on any device, independent of the instrument or infrastructure, providing the interoperability needed to enhance the user experience. It helps to enable contactless payment and communication between devices and at the same time this technology is useful in mobility, payments and retail,” explains Abhishek. “Once the software is updated through the server within seconds, the merchants are equipped to transmit the bill amount, details of the transaction by way of an audio signal. Customers can authenticate payment by only unlocking their phones.”
Sound travelling at 767 miles/hour effectively addresses the challenges associated with QR code and NFC. While QR code scanning requires a working phone camera, NFC (hardware) works only on smartphones. ToneTag does not need either. It is also the first company to enable contactless payment acceptance on Electronic Data Capture and the first to introduce blockchain in the payments space.
ToneTag technology has been used by 50 million consumers. It has enabled 3,10,000-plus merchants to accept sound-based payments. It is also closely working with Mastercard and Finacle to onboard their banking clients. ToneTag is working with ICICI Pockets (wallets + UPI payments), Amazon Pay, FreeCharge, Yes Pay, Bank of Baroda and Airtel Money among the issuing partners.
“As the mobile payment vertical in itself is very new, hence a lot of existing players look at us as competitors rather than enablers. ToneTag is a product company and wishes to work closely with existing service providers,” explains Abhishek. ToneTag charges a licence fee for its product with payment instrument issuers, while with merchant acquirers it charges a small fee on every additional transaction the technology brings. ToneTag RetailPods are available for purchase or rent.
Investors in ToneTag include Amazon, Mastercard, Reliance Capital, 3one4 Capital, Amansa Capital with total funding at $10.3 million.