Soundwave technology is as cool as it sounds. A new form of digital payment technique for small business, this technology is slowly gaining popularity in the country to help make payments easier.
According to a BCG report, India’s digital payments ecosystem is estimated to reach over 500 billion USD by the year 2020.
Does this call for innovation to meet such growing requirements? How long can the traditional methods of digital payments sustain such a massive economy? One answer is using Soundwave technology to enable digital mobile payments.
What is Soundwave technology?
Digital payments in India can only take place with internet availability. Other traditional means of payment include NFC (Near Field Communication), Quick Response (QR) Code and UPI ( Unified Payments Interface). However, not all mobile users in India have a steady mobile data network.
All mobile phones in India are able to receive and generate sound. Soundwave based-digital payments rely on using this sound as an interface. It uses encrypted high-frequency sounds from paying device that gets caught and received by the merchant device.
How does Soundwave Technology work with Mobile payments?
Using SoundWave technology:
- Merchant’s payment device generates a sound wave that carries secure and encrypted data.
- Customer’s phone receives and translates these sound waves into analogue signals.
- Responds accordingly to authenticate and complete the transaction.
Sound generation and reception hardware already exist in every mobile phone. Because of this, there are no technological barriers to make these payments happen. Sound Wave technology makes use of this capacity of mobile phones to provide an alternative communication medium between the consumer and the product/service provider at the Point of Sale (POS).
Why was Soundwave technology invented?
Over 450 million Indians are expected to be using smartphones by 2022. This calls for an increase in the need to ease mobile payments for small businesses and their customers.
However, the digital payments sector is still unable to cater to over 50% Indians, mainly due to a lack of internet access in all areas and a general lack of awareness about the need for digital payments. Internet presence in India stands at only 31% and will barely cross the 50% benchmark till 2021, which means the digital payments ecosystem will continue to remain inaccessible to nearly 600 million Indians till 2021.
According to the Pew Research Centre, digital payment solutions are largely designed for smartphones, and the smartphone penetration in India is just 24%.
Since Sound-wave technology does not require an Internet connection or NFC/QR code apps, this technology can help small businesses cater to a wide array of customers.
Over 600 million Indians require digital payments. So, there must be a way to use digital payments without smartphones. Soundwave technology is a possible dealbreaker here.
How Soundwave-based payments benefit small businesses
Soundwaves technology is especially beneficial for those who do not have smartphones.
Scalability is the main reason why Soundwave technology is the future of digital payments.
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.
Merchants have a low cost of adoption for such modes of payment and this can lead to an ideal product to market fit. This will range from small scale businesses to large retail companies.
Also, the technology for sound-wave payments is existing and does not involve huge costs to be implemented. Above all, sound-wave payments are entirely secure, which can be a relief amidst the rising incidents of cyber frauds and security.
The best part? This mode of payment is inexpensive.
How to use Soundwave technology for small businesses
Soundwave technology already exists in some mediums that facilitate P2P payments like Google Pay (Tez). The key to implementing Soundwave technology is proximity, irrespective of the medium.
New innovation startups like ToneTag are taking this technology to the digital payments sector. The company offers Sound Wave technology adoption for merchants and consumers alike at incredibly low costs.
There is a possibility of over 668 million users implementing sound-wave technology in their mobile payments, so there is hope for India becoming a completely cashless economy.
Like soundwave technology payments, Instamojo facilitates digital payments for small businesses through different modes, in one platform. If you are looking to collect payments online, set up a payment link from our website and track all your online transactions.