‘Tonetag is a sound business’
Tonetag uses sound waves to enable contactless, offline data communication across devices. Launched in 2013 and backed by Amazon, Mastercard, 3one4 Capital and Amansa Capital, it claims it is the world’s largest sound-wave communication technology platform. KUMAR ABHISHEK, co-founder and chief executive officer, spoke to Raghu Mohan. Edited excerpts:
Why did you opt for sound as a medium for enabling payments?
The limitation in wireless technology is that both consumers’ and merchants’ devices (mobile phones) must have wireless modules. Globally, this was the biggest challenge to solve even for Apple, when they launched Apple Pay. In India, hardly 20 per cent of mobile phones have nearfield communication (NFC) wireless antennas in them. I mean, it is not of a grade where they can manage payments.
We wanted to start by using sound for digital payments, and then extend it to digital commerce. Now, both these verticals are so huge that you cannot rely on a technology, or build one which solves the problem for only a fraction of the population. As long as everyone has a mobile phone, we should be able to solve this problem, and that is where sound came in.
This technology works even in a limited network area or with no internet connectivity, especially for feature-phone users. The transaction is highly secured when compared to card, or other digital payments. There is realtime acknowledgement and it is fast — under three seconds! We charge a licence fee for our product with payment instrument issuers and levy a marginal fee on merchant transactions.
How does this compare with NFC or the QR code?
Look at the investments Google, Amazon, Microsoft — or now even Facebook — have made in voice technologies. The reason is that, to a certain extent, their investment in NFC has moved away, and now they are very much investing in commerce through voice supply. The challenge they initially faced was to establish an identity for the person who is speaking offline.
Tonetag has been able to showcase that we can put an identity to your voice. We can do payments and hence, the commerce applications will start improving. So, the key people who have the ability to drive Nfc-led payments are actually going and investing today more in such voice-based interfaces.
Can you illustrate a typical transaction using Tonetag when, say, buying a washing machine?
A customer can either make an offline or a digital payment to purchase the washing machine. In the offline case, a customer needs a valid virtual payment address, calls an interactive voice response number, follows the instruction to enter the amount and PIN, and receives instant confirmation of the payment. In this scenario, the merchant’s device carries a tone encrypted with details for enabling the payment. It also acts as a payment acknowledgement device for the merchant.
When it is digital using sound waves, the customer needs an Amazon app, or any Tonetag partner application to process it. In this scenario, both the customer and the retailer need to open the app. The customer taps “send money”, and the retailer on “receive money”.
Will people opt for a sound-based interface just to see technology at play?
We are playing on the “experience bet”. We are saying that eventually, you will shift to voice because it’s far easier and better when it comes to experience. People who struggle today with a transaction because of their digital inability will be very comfortable with voice in their own language. Similarly, there are not enough cardreaders where people can swipe cards. Even using the card-reader has a learning curve involved, and people end up paying in cash. Using Tonetag is like speaking to the cashier.
Will noise disturbance at an outlet affect data transfer?
The background noise will not hamper the transaction. We are working with large global companies and doing millions of transactions on this protocol. We worked with a lot of research institutes to a point that, even in an environment where you cannot hear the person next to you, our payment system will still pass through. That’s where a lot of large players went ahead and integrated the solution.
If you talk about voice, Amazon is the largest player on the planet with Alexa. Nobody is doing the kind of volumes that Amazon is doing, correct? And they are also processing some of these payments, which tells you the confidence that our app brings, when it comes to solutions for payments or commerce with voice.
The National Payment Corporation of India (NPCI) is doing an interactive voice pilot. How will this play out in your business world?
It complements the sound ecosystem. For example, you can speak on a feature-phone for fund transfer. Speech recognition and identification, biometrics, the transfer of information of merchants, or simply put, more than 80 per cent of the heavy lifting is done by sound. If tomorrow NPCI says that you can now speak on your phone and do a fund transfer, and don’t even have to download an app for it, a person can just talk and the payment will happen. This behaviour change is something which supports our initiative as well.