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Interview: ToneTag CEO Kumar Abhishek on bringing voice-based payments to the masses

ToneTag, the seven year-old voice-based payments company is working to bring voice-based payments to the masses. The company has been working with the National Payments Corporation of India (NPCI) to provide voice-based payments to the Unified Payments Interface (UPI) system, and will soon exit its pilot programme under the Reserve Bank of India’s (RBI) regulatory sandbox, Kumar Abhishek, founder and chief executive officer, ToneTag told MediaNama in an interview.

The success of the UPI platform has transformed the lives of consumers and small businesses across the country. Yet such digital payments platforms are accessible only to tech-savvy, urban top 15% of the population of the country, Abhishek said. This is why payment companies and the regulator is pushing for offline payments solutions that work on feature phones.

Voice-based payments are the future: The majority of the population still depends on cash to transact due to network issues, lack of financial and digital literacy and because they cannot afford to buy smartphones, Kumar said. Which is why contactless voice-based payments solutions are the future of payments in India, he claimed.

ToneTag’s partnership with the NPCI: We are looking at solutions where UPI can be accessed on feature phones and without an app, Abhishek said. “he idea is to integrate ToneTag’s solutions within the NPCI system so that all existing UPI players can integrate voice-based features in their apps. Through our solution, customers can make a normal phone call, which goes directly to the NPCI, and with their voice they can make a payment provided they have proximity to a merchant at a maximum of 1 metre,” he explained.

Voice solution will process payments in 4-5 seconds: Most payment players are integrating the payments platform through a Software Development Kit, said Abhishek, adding that their integration with NPCI will ensure all UPI players can process voice-based payments through an upgrade of the UPI SDKs. “We generate certain voice and audio frequencies which is sent to the NPCI’s server, through the call channel. So a customer walks up to a merchant, the customer dials a specific number and brings the phone close to the merchants’ phone or Point-of-Sale device,” he said.

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Kumar added that the software within NPCI’s switch essentially records the digital signature which both the customer and merchants’ device will generate. Thereafter, the software will decode audio frequency to understand the customer UPI handle and the Merchants’ UPI handle. “Our software has been integrated at the NPCI’s UPI switch, to ensure all of this happens in 4-5 seconds,” he said.

Replacing traditional PINs with Voice: Right now you have to enter a UPI PIN to approve a transaction, we see voice replacing the need for a PIN, at least for specific use-cases, going forward, Abhishek said.”The merchant phone will emit a specific audio frequency, which is embeded with data, which will be carried to the NPCI’s systems. Our system will extract this data from the audio and process the transaction. Voice recognition is a very small part of the solution, the larger piece is to use sound itself to transfer data. In the case of FASTag payments, the RFID tag is based on radio frequencies in order to transfer data”

Under ToneTag’s solution, the same UPI ID, for the customer or merchant, that is registered with the NPCI’s UPI library will be transfered and communicated through sound, he said.”The NPCI’s UPI switch will not differentiate between a voice-based UPI transaction and regular app-based transactions because our decoder sits between the merchant/consumer and the NPCI’s server,” Abhishek added.

Exiting RBI Sandbox soon: We are working on solutions for UPI, cards and e-wallets as part of the sandbox, Abhishek said. “We began testing our solution in January and soon we will exit the testing phase of our pilot. The idea for the sandbox is to evaluate various solutions, understand whether it can be scaled and how can the regulator make a specific solution a public good. Once the RBI approves a specific solution under the sandbox, based on verification, evaluation and testing, the next step is to see how large payment institutions can adopt it,” he said.

Digital payments are inaccessible to 700 million Indians: The problem with today’s payments market is that it is restricted and accessible only to the top Indians, Abhishek said. “Just like cash, digital payments methods need to be available to every citizen in India and they should feel as comfortable using these payment methods as they are with cash. The challenge is that only 100-150 million have access to digital payments methods, with over 10 payment options. But there are 700 million customers who do have these options. They have feature phones and even if they have smartphones, they need financial and digital literacy to use these platforms,” he said.

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Update (March 12, 2021 5:22pm) Updated based on Editorial Direction. Originally Published (March 10, 2021 6:38 pm)

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