In digital payments, sound wave scores over Bluetooth, NFC, RFID, and QR

29th May 2018
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At one point, vinyl records and gramophone players were the only way to listen to music. Then, hi-fidelity stereo systems and cassettes became available and gramophones were only found with hobbyists and collectors.

Similarly, a host of other products and technological paradigms have come to compete with each other, with definite winners and losers, like mobile phones over digital organisers and WiFi routers over dial-up modems. Today, people across the world are faced with a similar choice in terms of communication technologies for digital payments.

Bluetooth, Near-Field Communication (NFC), radio frequency identification (RFID), Quick Response (QR) codes, and Sound-Wave systems are top contenders as the wireless short-range communication technology of choice for digital payments systems. Each system has its own unique advantages and weaknesses, and there is no clarity yet on which method will end up becoming the standard of the future.

However, when it comes to the conventional variables that consumers and providers rely upon, there seems to be little doubt on the subject – sound-wave has the others comprehensively beaten.

How and why consumers choose

There are a host of different reasons why certain technologies end up dominating a particular space and the most crucial aspects that determine consumer choice in that regard are cost, accessibility, and convenience. These aspects are expressed in ways that are deeply linked with each other - consumers and providers might be willing to be inconvenienced a bit more for a lower cost.

Some might be willing to pay a bit more to have an option that is always accessible; others might be willing to inconvenience themselves even for a small drop in the total cost they have to bear. However, if any technology can conclusively deliver the same outcome at a lower cost, be more accessible, and more convenient to use, it is extremely likely to win the hearts of customers.

When it comes to digital payments, issues related to security also become important, especially since insecure methods could put a consumer’s privacy and finances at risk. In the race between Bluetooth, RFID, QR codes, NFC, and Sound-wave, these four variables – accessibility, cost, convenience, and security – will determine the eventual victor in this competitive space.

Why sound-wave is poised to win the race

The beauty of sound-wave systems as a means to convey information lies in the fact that this technology can be enabled on any of the 730.7 million mobile phones in the country. Unlike Bluetooth, NFC, or QR codes, there is no requirement for a smartphone. In terms of accessibility, none of the other technologies even comes close; there are an estimated 239 million smartphones in the country, and only 19 million smartphones with NFC capabilities.

For merchants and retail store owners looking to transact with anyone who walks into their store, and for the millions of Indians who don’t yet have a smartphone, sound-wave is the only option.

In terms of costs, there are two things to consider – cost to consumer, and costs in terms of deployment and operation for business owners. When it comes to Bluetooth, if the business owner’s phone/device is Bluetooth-enabled and the customer has a smartphone as well, the cost is negligible. Business owners can also use Bluetooth readers, which are relatively inexpensive and cost between $10 and $20. However, an NFC reader will cost between $50 and $250, and each NFC tag will additionally cost between $1 and $4, making this a prohibitively expensive option. RFID readers are even more expensive, requiring an investment of anywhere between $500 and $2,000 to deploy. QR codes are, like Bluetooth, relatively cheap to deploy, costing cumulatively somewhere between $12 and $50 to deploy and operate. Sound-wave is still cheaper, costing somewhere between $10 and $25, depending upon the volume of transactions the system is being deployed for. When it comes to cost, NFC and RFID are clear losers, while Bluetooth and QR codes are just marginally more expensive than Sound-wave.

Convenience and security give sound-wave an edge

When it comes to ease-of-use, Bluetooth and QR codes lose out heavily to NFC, RFID, and Sound-wave technologies. Using Bluetooth or QR codes require a few minutes of device handling, requiring high user intervention and multiple clicks. This can be incredibly inconvenient for retail shoppers and customers hoping for a smooth checkout experience. NFC and RFID allow for a transaction with minimal user intervention, but the low range of NFC makes this more inconvenient.

Sound-wave, on the other hand, works without the requirement for intervention and across medium and short ranges, as the devices just need to be within earshot of each other. While RFID, NFC, and Sound-wave are easier to use, RFID and Sound-wave are a shade better than NFC here.

Finally, when it comes to security, all other technologies other than sound-wave work on standard and open protocols, making them vulnerable to hackers and malicious actors. Sound-wave, on the other hand, works with multiple layers of encryption, and even relies on Blockchain to ensure complete security and peace-of-mind for consumer and business owner alike.

Essentially, while NFC and RFID are more convenient, they are prohibitively expensive; and while Bluetooth and QR are affordable, they are difficult to use. In each of these categories, sound-wave overshadows its competition, and when it comes to security and accessibility, it completely dominates the field. While the verdict is yet awaited, the leader in this field is clearly sound-wave technology.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

 

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