Post the implementation of demonetization, the government made substantial strides towards the propagation and acceptance of digital payment methods across the country. The launch of BHIM UPI, Aadhaar linked payments and the intensive promotion of mobile wallets, ensured that large numbers of people accepted digital payments as the new norm, easing the heavy reliance on cash that the country previously experienced. However, due to certain pitfalls in the methods through which digital payments were enforced on Indian consumers, a huge amount of cash still changes hands within the Indian economy. The continued use of cash has a deep impact on the retail sector in India, which is still bearing the financial burden of handling cash and is at a constant risk of cash fraud as the medium of payment is largely unregulated. However, new age startups, utilizing the power of sound, are creating a viable solution to the massive, ongoing problem of cash usage in the retail sector.
The emergence of sound-wave technology in India
Currently, India is home to 8 million mobile phone users, of which 200 million use smartphones, leaving 600 million cellphone users without the ability to use the internet or QR codes for payment. Of these, a mere 6 million phones are NFC-enabled. This eliminates a major chunk of people from the group of Indians who have access to digital payment methods. This problem that lies solely in the need for interoperability similar to that of cash is now being solved by harnessing the power of sound.
Recently, sound has been making considerable waves in the digital payments landscape by offering Indians a payment method as universal as cash. New-age, innovative startups have started investing their resources into researching and creating digital payment frameworks that utilize sound as the mode of transaction, eliminating the need for people to own smartphones in order to jump on the digital payments bandwagon. The major benefit of sound-wave technology is that it does not require costly infrastructure or even an internet connection to make payments. Any basic phone with a speaker is well-equipped to send and receive payments using sound-wave technology. The uniquely innovative payment method, therefore, does not require a high resolution camera for QR reading or NFC-enabled infrastructure to read radio-waves.
Sound-wave in the retail sector
After establishing itself as an indispensable part of the digital payments landscape, sound-wave technology is all set to take India’s retail sector by storm. Supermarkets, retail chains, malls, QSR, restaurants, coffee shops in India are all, therefore, poised to reap the multiple benefits of hassle free payments through sound-wave technology.
The foremost motivation behind retail stores and similar shops adopting sound-wave technology is that its simple infrastructure can be easily integrated with existing POS terminals, EDC machines, mobile wallets and banking apps. Stores would not be required to invest in any additional, expensive hardware. This will empower not just large retail chains but also small scale mom-and-pop stores located in rural areas to experience financial inclusion by being able to access a low-cost, low-investment digital payment method.
Further, pioneering sound-wave technology providers such as ToneTag offer additional, iron-clad security measures using Blockchain technology. Adopting such technologies will allow retail stores to minimize fraud and theft, a phenomenon that is still rampant across the sector even after the implementation of seemingly secure technologies such as RFID and chip cards.
The future of Retail with sound waves
The foreseeable future for sound-wave based technology seems undeniably positive thanks to the convenience and savings that it offers to retail merchants. To customers, it offers safe and quick ways of making payments while shopping at their favorite stores. They can do away with need for carrying bulky notes and plastic cards, while also foregoing the need for standing in queues. Customers will be able to pay and be on their way within seconds.
Going forward, sound-wave technology will allow retail stores to offer more targeted marketing. Technologically advanced sound-wave based apps will be able to pick up on various advertisements and videos that consumers prefer to watch on TV or YouTube channels. Retail stores will be able to utilize this information and glean insights into the tastes and preferences of consumers, thus creating more personalized marketing campaigns for them.
Sound-wave technology is all set to have people transacting at the speed of sound, as merely walking past the merchant’s device can commence and complete a transaction seamlessly. The major challenge now lies in promoting and encouraging new-age startups to propagate knowledge around the usability and convenience of sound-wave based payment methods. The government and leading digital payment providers must play an active role in creating a breeding ground for innovative startups to nurture their ideas and finally put an end to the widespread use of cash.
India is expected to become the world’s third-largest consumer economy with a size of USD 400 billion in consumption by 2025. Since the Indian retail market is expected to reach $1 tn by 2020, sound-wave technology can experience the much-needed boost it requires by integrating itself with the retail sector. The retail sector, growing at an exponential rate, will in turn, be able to enhance its customer experience by leaps and bounds. Finally, the end-consumer will get the much required freedom from using cash and cards, enjoying the sheer convenience of sound-wave technology.
The article has been pen down by Himaghna Dey Sarkar, CXO, ToneTag