Toll roads across the country have become the new frontier for digital payments disruption, as India looks to enable seamless payments on-the-move.
Back in 2007, research indicated that the Indian retail industry was losing a mind-boggling Rs 9,691 crore due to shoplifting and waste. At the time, this was considered one of the greatest barriers to the organization and success of India’s retail industry. Over a decade later, shoplifting is no longer at least being reported as a major problem. The reason? Smart technologies that have made shoplifting from large retail supermarkets and stores tough.
Today, most large malls and retail stores have strong surveillance systems to prevent shoplifting. To catch potential shoplifters, most have employed some kind of technology-driven system as well. One of the most popular security systems is the use of Radio-frequency identification (RFID) technology. Consumers in India can see detectors placed at the entries of major retail stores across the country, and items have small RFID tags on them. Shoplifters trying to walk through the detectors with any items from the store will set off an alarm, which alerts security personnel and helps in the apprehending of such offenders.
However, RFID technology was not developed for retail initially, even if that is one of its biggest uses at present. The original business plan showed to investors back in 1969 primarily explored uses in transportation like automated toll systems, automatic gates, etc. and made no mention of retail. It is for this use that the National Highway Authority of India is looking at RFID.
For whom the road tolls
But what do supermarket security and toll plazas on a highway have in common? The challenge with both experiences is making it as seamless as possible. At present, it is estimated that nearly USD 21.3 billion is lost in India annually because of delays and an increase in fuel consumption at toll plazas across the country. Concerned by this figure, the Indian government is currently working on a plan to look at digital technologies to make the toll payment experience as convenient and efficient for commuters as possible.
The ability of an RFID tag to track and exchange information with sensors electronically and automatically without the need for human intervention makes it capable of performing this function. The tag-and-sensors-based RFID system can count the number of uses of a toll road for a commuter, allowing for either a pre-paid account or a per-use charge on their accounts. However, this technology poses some challenges in the realm of automated toll collection, especially in a market like India where it has never yet been deployed at such scale.
Cost is a bar
It is important to account for the fact that India represents fascinating problems of size and scale. For RFID to cater to the millions of vehicles that pay the small sums which total up to that astronomical figure, it must have the capacity to be applied universally and scaled across the thousands of toll booths across the country. Unfortunately, RFID tags and readers are too expensive to allow for easy scaling and deployment.
RFID readers, depending upon their range, cost between USD 500-2,000; active tags cost around USD 25 each. With millions of vehicles commuting through toll roads in India every single day, outfitting each toll station and every vehicle with readers and tags becomes woefully and prohibitively expensive. In order to procure millions of these tags, distribute them, and then account for the losses, breakages, wastage, and theft would put a serious dent in the toll collection income. Even if these challenges could somehow be overcome, building a universal automated toll collection system using RFID comes with its own problems.
Paying (not driving!) at the speed of sound
For a solution, we can look once more upon the retail industry as a source of inspiration. Retailers have also been on the lookout for a technology that can make the payments experience as seamless as possible – and they have increasingly found Soundwave to be the best system to deploy. The technology relies on using encrypted sound waves to transmit information. Essentially, any cellphone can be used as a tag – even if tags are required, they cost less than 1 USD. These can be used to let the store know what items have been picked up by the customer, and the payment is done seamlessly as the customer walks out of the door.
This can work just as effectively at toll plazas for vehicles. Soundwave is just as convenient as RFID and is substantially cheaper and easier to scale. Soundwave readers are around 50 times cheaper than RFID and cost in the range of USD 10-25. Furthermore, these readers and transmitters are far more generic, and applying a universal standard requires nothing more than a software update. For creating the seamless, efficient, and convenient mobility experience we want – whether in retail or on the road – Soundwave seems to be the solution we’ve been looking for.
Himaghna Dey Sarkar, CXO, ToneTag, oversees Business Development and Channel Engagement to develop direct as well as channel business for ToneTag globally.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)