Transacting at the speed of sound – is Soundwave technology the future of digital payments?

By: | Updated: June 28, 2018 5:03 PM

Soundwave technology offers solutions to the existing challenges that lie ahead of the digital payments universe

digital payments, future of digital payments, digital wave,  internet services, NFC, Soundwave technology, digital economy , global market for mobile paymentsHimaghna Dey Sarkar, CXO- Chief expansion officer, ToneTag. (Photo Source: Linkedin)

The digital wave has become an all-encompassing transformational paradigm shift that has indelibly changed much of how humans interact with each other. Today, a large proportion of our daily communication with others happens across digital channels. For many of us, the digital wave has also changed the way that we pay and manage our finances. Digital payments being carried across the internet have taken us far from the day in which bills would have to be paid in cash or through a cheque. Many people across the world are convinced that the future of transactions will be digital, and many businesses are operating today on the assumption that there will be no need for paper currency in the future.

However, there is still much ground to be covered before this becomes a reality. Cash is universally accessible as a medium of exchange and requires no infrastructure at the level of usage. Digital payments at the very least require a digital device inherently, and at present is an option only for those who use internet-enabled smartphones. The digital payments industry, to live up to its full potential and replace cash, must make themselves more accessible, more secure, and more convenient to use. Once it does that, the companies that are driving the development of this space would be able to avail of a trillion-dollar opportunity.

The opportunity and challenges ahead

According to industry sources, the potential global market for mobile payments is USD 2.3 trillion, with USD 300 billion of it being addressable at present. The massive growth and potential of this sector of the digital economy is being driven by four ‘mega trends’, according to a BCG-Google Report on Digital Payments – a) technology, b) new-age players, c) customer expectations, and d) enabling regulations. Based on these trends, the BCG-Google report projects that India’s digital payments ecosystem will swell to USD 500 billion by 2020. It anticipates that person-to-merchant payments will grow to USD 224 billion and merchant-to-merchant payments will reach USD 176 billion by 2020, with the remaining USD 98 billion taken up by peer-to-peer transactions.

The growth and use of digital payment systems globally have relied almost entirely on the spread of mobile internet. The number of users accessing internet services on their mobile phones is expected to reach 65% of the world’s population by 2020, and 58% of these users will be expected to use smartphones. Promising as these statistics are, the technology represents a major part of the problem. Digital payments systems rely on the internet, mobile phone cameras (for QR codes), GPS geocoding (for security), and NFC-based technologies to provide the interface between the payer and the merchant. Unfortunately, this requires both the merchant and the payer to have the basic infrastructure and be using the same systems to transact.

The other part of the problem lies in meeting consumer expectations. Many users are finding digital payment systems inconvenient, especially in markets like India where the penetration of these technologies is still in its nascent stages. Further, variations in the kinds of smartphones that users have – few, for example, come equipped with NFC out of the box – are making this complicated and inconvenient for merchants as well.

The future of digital payments – Soundwave technology

The good news is that new-age players in the digital payments ecosystem are constantly innovating and evolving their offerings to overcome these challenges. One of the most promising developments is the evolution of Soundwave technology. This method relies on using sound as the interface, with encrypted high-frequency sounds from the payer device being caught by the merchant device.

The first major benefit of this mode of transaction is that it doesn’t require a smartphone or an internet connection on the part of the user. Any mobile phone can produce sounds, and there is no need for a high-resolution camera, QR codes, or NFC-enabled infrastructure. Further, this technology is also more convenient, as a shopper can just walk past the merchant’s device and the transaction can be conducted seamlessly at the speed of sound. The pioneering players that are developing these technologies are also enhancing security, with companies like ToneTag using Blockchain technology to ensure that these transactions are more secure than other forms of digital payment.

Perhaps the biggest reason why Soundwave technology is expected to be the future of digital payments is its absolute scalability. Merchants and users will be able to adopt this at minimal cost, reducing threshold barriers and making it more attractive for mass deployment and use. Further, the technology is inherently inclusive, as the ability to transmit and receive sounds is not as technology or capital intensive than the alternatives. With 668.3 million users of Soundwave technology expected by 2021, the future of digital payments seems sound and secure.

Himaghna Dey Sarkar, CXO- Chief expansion officer, ToneTag

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition