A Sound Payment Option Working at Infosys, Kumar Abhishek, went on to launch ToneTag, a contactless sound-based proximity payment solution.

"Candies' in India have a unique significance of their own, apart from eating them. We know how they are used as a legal tender by shopkeepers to pay customers back, thanks to the deficit in supply of chillar (small change/coins). Working at Infosys, Kumar Abhishek, as a banking and retail consultant, realized the need of a unified solution in banking and payment space, and went on to launch ToneTag, a contactless sound-based proximity payment solution, to solve that problem - as the next level from near field communication (NFC)-based payments.

Abhishek experienced multiple instances, when he realized the enormity of the problem in India. However, it came as a surprise to a friend, who came from Singapore, when a small retail store owner handed him candies and other things instead of some change. This sparked off the idea in him of digitalizing payments. "This was so strange for my friends. I told them that it's because of low currency value of Indian Rupee," says Abhishek, who started ToneTag around November 2013 in Bengaluru.

Abhishek and his co-founder, Vivek Singh, travelled extensively to multiple places to understand how large the problem is. For this, they deliberately bought products that required the shopkeepers to return small change. "In Chandauli, UP, a shopkeeper handed me a pack of Parle-G biscuits, saying that customers happily take them because they can munch them along with tea. I was surprised to see the extent of "adjustment' people do," adds Abhishek.

Instead of renting an apartment to launch ToneTag, he started working from his sister's house, however, moved out after a year, when ToneTag raised angel investment from former Infosys Executive, Ram Sellaratnam, and former Managing Director at OANDA (foreign exchange company), Rajesh Yohahanna.

Since Abhishek and Singh were most of the time on the road, during that one year, to acquire merchants for their product, they bought a used Tata Indigo car at a rock-bottom price to carry various collaterals along. "It was the "fourth-hand' car that became our technical office. All the banners, coupons, material for standees and kiosks, and other office things were kept inside it," he adds.

Blockchain for Payments
While contactless payments solved the problem of carrying cash, but Abhishek realized that NFC wasn't the most fool proof way of securing customers' information from getting compromised.

Unlike NFC, Abhishek says that the information gets encrypted before it leaves the customer's smartphone. "This is technically more secure than card or NFC payments. In card payments, encryption begins when the card is swiped. In NFC payments as well, encryption is applied once the data need any extra hardware, like NFC tag, or connectivity to make payments via sound waves. The merchant's device emits a sound on receiving payment from a smartphone, brought in 20 cm proximity to the device. ToneTag is currently present in 1.10 crore smartphones and Abhishek believes it will cross two crore mark by end of this year.

(This article was first published in the November issue of Entrepreneur Magazine )