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The significance of soundwave technology-based payments A 'sound' solution is needed to ensure penetration of digital payments and other such services even at the most granular level

By Anil Kumar

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Since time immemorial, civilizations have devised numerous payment systems in return for the commodities and services availed. The primordial barter system was replaced in time with the first proto-primitive form of currency, namely coins, forged out of iron bronze and copper. Paper money came into use post that and became the most dominant form of cash transaction across the globe. However, the onset of the 21st century saw a phenomenal advancement in technology, being robustly adopted across all industries and verticals. In fact, with a considerable rise in the usage of credit and debit cards within the past two-three decades, there has been a remarkable shift towards "cashless' payments. Such a need, supplemented by the digital revolution that the world has recently undergone, has led to the rapid development, deployment and adoption of digital modes of transaction such as netbanking, mobile wallets, QR codes and unified payments interfaces, among others.

In a developing nation like India, the benefits of going cashless are immense. While cashless modes had been gaining traction in the domestic landscape, the demonetization the Indian government in 2016 gave it a much-needed boost. Moreover, the rising ownership of smartphones and deeper Internet penetration has further led to the country witnessing a significant transition towards going digital and adopting cashless modes of payments.

However, while several developments have been made on the digital front, these still leave out an irrefutable percentage of the population that still exists without a smartphone and is devoid of access to Internet connection. To put this into perspective, around 36% of the nation's population was projected to have a smartphone by 2018. This left a significant chunk of the population, indicating how the Indian masses are still dominated by feature-phone users. All these figures and facts signify how the digital payments sector, which is heavily based on the above-mentioned infrastructure, is still inadequate in serving more than 50 per cent of the Indian population. A "sound' solution is needed to ensure penetration of digital payments and other such services even at the most granular level. This is exactly where the new and promising soundwave technology comes into play.

Soundwave technology provides a highly viable alternative for digital payments, taking away the reliance on infrastructural factors such as smartphones and Internet. Essentially, this digital payments mode leverages the medium of sound to carry out transactions. Point-of-sale terminals and electronic data capture machines sold across the country are devised with the basic ability to gather and transmit sonic waves; soundwave technology uses this feature to its maximum advantage by furnishing an alternative communication medium between the customer and the merchant/service provider at the point of sale. In this technology, the vendor's payments device transmits secured and encrypted data through a unique sound wave, which the customer's phone obtains and converts into analogous signals, further responding to validate and thus fulfilling the transaction process, all on an instant basis and with real-time acknowledgment.

Such a groundbreaking technology has the potential to change the very structure and understanding of the mobile payments ecosystem, as both the customers and the retailers can now benefit from an instantaneous, convenient and seamless transactional process without the need for an added physical infrastructure. The whole transactional and digital payments universe can be transformed into sanctioning a clear technological passage for the billion-plus citizens of this country through the simple means of a standard cellphone, without having to rely on smartphones or Internet access.

The biggest advantage of soundwave technology is perhaps the fact that it can catalyze the process of achieving inclusive economic growth in India. This is because ease of access to digital payments brought by this technology can comprehensively help cover the remotest parts of the country, enabling it to serve even the secluded and marginalized sections of society. Furthermore, the low and almost nonexistent costs of this technological adoption for vendors and procurers alike will create a perfect demand-and-supply model in the market, thus unleashing countless new growth opportunities.

Essentially, soundwave technology-based payments are a more viable, accessible, secure, convenient, instantaneous and efficient mode for all stakeholders involved in the payments ecosystem. Further, it has the potential to fulfill the longstanding promise of a digital payments methodology that delivers both the comfort and ready availability of cash as well as the reliability and speed of digital wallets and banking applications. Such an innovative solution might not just disrupt the digital payments landscape, but also expedite the process of democratizing its usage, thus boosting the financial inclusion drive and subsequent economic growth of India.

Anil Kumar

CTO, ToneTag

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