Sound-based payments likely to be introduced as part of UPI

National Payments Corporation of India is currently in the process of testing sound-based payments with three companies: PhonePe, ToneTag and UltraCash.

A new way to pay is around the corner. The National Payments Corporation of India is toying with the idea of introducing sound-based payments as part of the Unified Payments Interface, it is learnt.

NPCI is currently in the process of testing sound-based payments with three companies: PhonePe, ToneTag and UltraCash.

In the last six months, the pilots have moved from preliminary tests to proof of concept stage where banks are participating with their independent mobile wallet products to see how sound-based payments can be plugged in.

Even as UPI has seen a steep rise in the value of transactions since August 2016, its efficacy as a payment medium for businesses is under test as merchants are still resisting it.

While the NPCI is trying to ease the experience through innovations such as QR code integration with UPI, the adoption has been slow forcing the body to look for other solutions.

For instance, ICICI Bank’s pockets app has integrated Tonetag’s sound pay solution on a trial basis and it allows people to pay at accepting merchants by just having their phone in proximity with the accepting machine.

“There is a huge demand of moving person to merchant transactions away from cash. QR code is interoperable but it has experience and security challenges since QR codes are static and they can be replicated easily,” said Kumar Abhishek, founder of Tonetag.

He said the sound-based payments combined the interoperability of QR codes and security of near field communication payments.

Tonetag has seven global patents in the space and has the largest network acceptance on soundwaves.

In India, the company boasts of 120,000  accepting merchants and has 42 million customers who can transact through phones.

Tonetag’s claim to fame is that it removes the need of deploying new hardware on both customers’ and merchants’ end.

The company achieves this by pushing out a software update to existing card swipe machines which can start accepting sound-based payments.

Sound-based payments work through emitting a high frequency sound note which is captured by a speaker or microphone at the merchant end.

That works as an authentication mode when payment is made in real time.

Photograph: Kind courtesy, Business Standard