Since November 2016’s demonetisation, digital payments in India grew by a massive margin in a matter of weeks. Initiatives such as BHIM UPI and Aadhaar-linked wallets normalised what was earlier just an alternate method of transacting.
Mobile wallets were promoted vigorously and a host of Indians accepted these as their preferred payments option. However, the truth remains, that in spite of the implementation of these methods, uptake by the economy has remained slow.
There lies a gap between implementation and uptake of digital payment technologies, and cash still exists in a major way in the Indian economy. Apart from a major lack of security, usage of cash has several drawbacks including handling costs and rampant cases of counterfeiting. Most sectors, especially the cash-heavy retail sector, bear the burden of cash, and a viable solution is still not available. Innovative startups have identified the gaps affecting the digital payments landscape in India and are working towards a universally acceptable solution.
Currently, 800 million people in India currently possess mobile phones. Among them, only 200 million people own smartphones. This means that a whopping 600 million people in India have basic phones that are incapable of accessing NFC, QR codes or even the basic facilitators of digital payments. Therefore, a large part of India’s economy has no way of making or accepting digital payments at all. Due to this reason, cash is still considered as the most widely used mode of payment.
Cash continues to hold sway in the country given its sheer interoperability. For instance, a 100 rupee note will retain its value throughout the country whether it is at a retail outlet or a toll booth. However, without the presence of the right medium, such as internet connection or infrastructure to accept digital payments, digital wallets cannot be viable. But, this issue is currently being resolved by technology strong startups that are leveraging sound as a medium for digital payments.
Through the power of sound, these companies are creating a payment method as seamless, if not more, as cash. It is expected to do away with the need for possessing a smartphone or an internet connection in order to transact digitally.
Sound-wave technology is working towards financial inclusion by enabling even feature phones to make digital payments. Being a software element, it can be easily integrated into existing hardware, making it cost effective. With its futuristic solution, sound-wave technology is inclusive and can help developing countries as well as technologically advanced nations to bridge all economies towards a cashless ecosystem.
Sound-wave technology is all set to transform the way the retail sector in India carries out its transactions. From large supermarkets to pop-up stores, all retail outlets will soon jump aboard the sound-wave bandwagon, boosting the entire economy.
The fact that is encouraging the retail sector to adopt sound-wave technology is its low cost infrastructure and seamless integration with EDC machines, POS terminals as well as mobile wallets. There is no additional cost of hardware attached to its adoption. This means that small-scale stores that have not been able to invest in digital payment infrastructure as of now, can do so without worrying about the financial aspect. Because this requires only a software update on existing infrastructure, the investment and cost involved are significantly less.
Another advantage of sound-wave technology is the security factor. New-age sound-wave technology startups such as ToneTag are adopting innovative security measures such as blockchain to reduce the risk of fraud and theft that have been the single most widespread pitfall in the retail sector, contributing to a significant amount of loss.
Sound-wave technology is quickly gaining traction in the retail sector and the buzz is not expected to die down any time soon. The positive impacts of this technology are endless. While customers receive a quick and hassle-free way of making payments, retailers can end their cash dependency in the most seamless manner. Soon, people will not be required to carry around bulky notes and plastic cards that can be easily misplaced.
When sound-wave takes the forefront of digital payments, all anyone will need is their mobile phones to make quick on-the-go payments.
Apart from its simplicity, sound-wave technology can also integrate messages in the broadcast feed from television, radio and digital signages. Audiences consuming the broadcast with the network’s app can receive real-time notifications, promotions, offers, CTA and surveys directly on their phones.
While every aspect of sound-wave is perfectly suited to the needs of the Indian customer, the only challenge now is a lack of awareness. Once customers are aware of such a universally-acceptable technology, it will give direction as well as momentum to startups working in this space.
These companies need the guidance and support of the government to be able to achieve the goal of a digital ecosystem and reduce cash usage in the country.
The retail sector in India is poised to hit the $1 trillion mark by 2020. This presents a unique opportunity for sound-wave-based technologies to grow in tandem with the sector. With such a boost, it will experience exponential growth and the sector will be able to significantly increase customer satisfaction. Once the entire economy enjoys freedom from cash, India can finally be recognised as a truly digital nation.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)