Soundwave technology is a new form of digital payment method for small businesses, which is making its way to the trend. The advent of demonetization gave rise to the birth of several online payment solutions in India that helped facilitate payments for everyone. A report by BCG report suggests that India’s digital payments ecosystem is estimated to reach over 500 billion USD by the year 2020.
One may wonder if this is a call for innovation to meet such growing requirements or the sustenance of traditional methods of digital payments in a massive economy.
Soundwave technology for digital payments
Web 2.0 has been driving digital payments, in case of both – the customer and merchant, other alternative modes of payment communication being NFC, and UPI. However, one of the major challenges is the lack of a steady mobile data network among mobile phone users. On the other hand, all mobile phone devices in India are built to receive and generate sound. Sound-wave based-digital payments use this feature of sound as an interface, through encrypted high-frequency sounds from the paying device that gets recognised and accepted by the merchant’s device.
How Soundwave Technology Works
- 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
Every mobile phone device consists of a sound generation and reception hardware, thus breaking the barrier of availability. Thus, sound Wave technology utlilises this capacity of mobile phones to facilitate an alternative communication platform between the buyer and the merchant at the time of transaction.
Challenges led to the invention of Soundwave technology?
The digital payments industry has been unable to cater to over 50% Indians, given the challenge of internet access in all areas and unawareness about the need for digital payments. Internet presence in India currently stands at 31%, and is expected to cross the 50% benchmark till 2021, indicating the possible inaccessibility of the digital payments ecosystem to nearly 600 million Indians till 2021.
Soundwave technology can help small businesses cater to a wide array of customers as it does not require an Internet connection or NFC/QR code apps,
Over 600 million Indians require digital payments. Soundwave technology is a possible dealbreaker to enable non-smartphone users to access digital payments.
How small businesses can benefit from Soundwave-based Payments:
For a more convenient mode of online payment solutions, the adoption of Sound-waves technology in digital payments can be an effective growth catalyst, especially beneficial for those who do not have smartphones.
The advantage of Scalability is the main reason why Soundwave technology is the future of digital payments.
The features of Sound wave technology reduce threshold barriers, enabling merchants and users to adopt the same at minimal cost. This thereby aids in the creation of an ideal product to market fit for business which are small scale industries to large retail companies.
Keeping in mind that the technology for sound-wave payments already exists, cost of implementation is relatively low. Above all, soundwave payments are entirely secure, making this one of its key selling points.
The use of Soundwave technology for small businesses:
When it comes to payments, proximity is the key to implementing Soundwave technology, irrespective of the medium. In fact, some mediums which facilitate P2P payments have already implemented sound-wave technology.
Research shows that there is a possibility of over 668 million users implementing sound-wave technology in their mobile payments. This in turn points towards achieving the objective of a cashless economy in India. Similar to sound wave technology payments, Instamojo provides a one-stack solutions platform facilitating digital payments for small businesses through different modes. For small business owners who are looking at digital payments, the process is as simple as creating a payments link on the Instamojo website and thereby track all online transactions.