Google to roll out SoundPod for small merchants amid Paytm crisis
Google piloted the SoundPod speaker last year, but did not proceed with a full-scale launch.
Google Pay is set to expand the availability of its SoundPod, an audio device that confirms payments, as Paytm, the inventor of the device, fights existential regulatory sanctions.
"We’re pleased to announce SoundPods will be available for small merchants across India over the coming months, bringing considerable ease and convenience to millions of SMBs," the company said in a statement.
"This is in addition to the slate of consumer and merchant offerings we announced in October 2023 to expand the availability of responsible credit in India–a mission that we’re well on our way towards with encouraging momentum," the statement added.
The company, which piloted the SoundPod speaker last year, did not proceed with a full-scale launch. However, it received positive feedback during the testing and helped merchants reduce the checkout time, Ambarish Kenghe, VP of Products for Google Pay, wrote in a blog post.
After introducing SoundPod, Google offered a daily plan with a one time fee of Rs 499, after which it would deduct Rs 5 per day for 25 days every month from the settlement account. Similarly, it also offered a yearly plan of Rs 1,499. It said that merchants would receive a Rs 125 cashback after 400 payments.
Google's latest offering comes at a time when the RBI has directed Paytm Payments Bank to stop accepting new deposits from March 15, 2024, due to "persistent non-compliances" and "continued material supervisory concerns".
However, Paytm payment devices–QR, Soundbox, and Card machines will continue to work even after the deadline.
It is also worth noting that Paytm is the company that invented payment soundboxes. Launched in 2017, the devices provide instant audio alerts to merchants on receiving payments in their preferred regional language.
Since then, its rivals, PhonePe and BharatPe, have also released similar devices. Paytm now has 8 soundbox versions, including a top tier model that can accept credit or debit cards. As of now, approximately 20 million merchants use Paytm's soundboxes in the country.
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Following the RBI directive, the shares of Paytm parent One 97 Communications have experienced heightened volatility, with shares hitting both lower and upper circuits. The stock price has almost halved since January 31 when the RBI imposed the sanctions.
Various brokerages, including Macquarie, Bernstein, and Goldman Sachs, have voiced their concerns over Paytm's recent crisis. Macquarie has downgraded Paytm to "underperform" rating and substantially reduced its target price by 57% to Rs 275, citing a significant risk of customer exodus due to the sanctions.
GIoldman Sachs has issued a 'neutral rating' for the stock and decreased the target price from Rs 860 to Rs 450, predicting a slowdown in the company's lending operations.
On the contrary, Bernstein has maintained an "outperform" rating, emphasising that recent extension of the deadline by the RBI would facilitate a smooth transition for Paytm Payments Bank accounts. Moreover, the firm believes that Paytm's merchants being able to use the company's QR codes, soundbox, and card machines is a "major positive" for the company.
However, Bernstein also cautioned about the "regulatory overhang" and the potential "reputation harm" that could have a long-term impact on the fintech firm's overall business trajectory.