Pranjal KshirsagarJul 22, 2016 10:00:50 IST
ToneTag founder Kumar Abhishek was working on core banking implementations in Singapore, when a friend asked him “Why is it in India we get candies instead of balance cash?” The question sparked the desire in him to create a better way to pay. He started doing extensive research on the viability of digital payments in India and returned to the country to study the market, the usage patterns of people and the problems they faced during payments. “I met people from urban as well as rural India, which gave me tremendous insights of the pain points of payments and how we can solve it. In a country like India, where cash is the most used payment method, millions are locked out of formal financial services,” says Abhishek.
After extensive research Abhishek, with his friend Vivek Singh established their venture to provide contactless payments facility in India that they called ToneTag. “We experimented with various existing payment technologies such as NFC, QR codes etc., but we came across many issues with them, primarily the high cost of deployment and lack of interoperability. This was why we chose sound waves as a way to make payments happen. The technology developed by ToneTag was interoperable and hardware independent, as it just needed a speaker and microphone to work. This reduced the costs associated with digital payments, making the technology viable not just for the young urban crowd but for everybody we met during our journey,” says Abhishek explaining the technology behind ToneTag. Apart from contactless payments, ToneTag also provides other proximity communication solutions such as location based customer engagement service.
Working with a team of around 36, ToneTag’s revenues are based on the licensing fee they charge to their partners for the use of their technologies. The company also charges a small fee on every transaction through their platform. Going forward, ToneTag aims to increase their revenues primarily through transactions, shares Abhishek.
Abhishek also explains how they aim to make customer and merchant interactions more meaningful by enabling operational and transactional interactions to go invisible. “This opens up a lot of future use cases and possibilities. All our merchant touch points could potentially become beacons, that can transmit messages, providing a great real time tool to brands and marketers,” he explains. ToneTag currently provides Big Data analytics based real-time loyalty, in-store payments, omni-channel customer engagement, invisible payments and brand and service discovery. Abhishek believes since their sound based technology is completely hardware independent, it is highly accessible. He thinks the ease of making one-click payments from the phone will drive consumers to adopt ToneTag.
A unique feature about ToneTag is its use of blockchain technology to detect and prevent fraud in payments. “ToneTag was one of the first to introduce blockchain technology to contactless payments globally. While paying through ToneTag, customers can identify whether the merchant outlet they are dealing with is exposed to risks or if it has witnessed any fraudulent transactions in the past. Similarly, merchants can ensure whether a customer is genuine or not. They can detect if the transaction is unusual or if the customer was involved in fraudulent transactions earlier, since all transactions are validated via public ledger. No party has the upper hand when all the transactions are recorded in a blockchain, providing unprecedented security to contactless and peer to peer payments,” shares Abhishek.
ToneTag had received series A funding from Reliance Capital in 2015. They also received funding from some angel investors. Speaking about growth plans, Abhishek says that they aim to deploy their technology at most POS terminals around the world. “We were the first and only company on this planet to enable contactless payment acceptance on EDC machines using sound waves. Being the first mover, ToneTag is poised to be a leader in sound based contactless payment. We’ll be working towards establishing a wholesome ecosystem for contactless acceptance through our partners in the issuing and acquiring side,” says Abhishek.
Speaking about competitors in the same space, Abhishek explains that ToneTag being a software element is non-competitive to device specific payment instruments or any banking app or mobile wallets. “We are providers of the technology and the ecosystem that will enable contactless payments. ToneTag can enable payments without any hardware updates can deliver value and reduce costs for everyone in the payment ecosystem,” adds Abhishek.
ToneTag is already working with 21 issuers, acquirers, banks, payment service providers, and tech companies in South East Asia, Europe, Middle East, Africa, Canada, Australia and USA. They also have global SI partners who are building service offerings over the ToneTag technology for their global and Indian customers as they have the capability to do the heavy lifting of pan-country roll outs. Their immediate focus is to assist these pan-country rollouts on the issuer and acquirer side.