ToneTag, a digital startup based out of Bengaluru, offers solutions to introduce contactless experiences at retail outlets, restaurants, banks, and even metro stations. Backed by Amazon, this startup lets users make digital payments through smartphones and feature phones without Internet. ToneTag offers solutions to its clientele to enable data communication and engagement services over sound waves. These solutions enable automated ordering and digital payment options at restaurants and pick-and-go shopping experiences at malls and supermarkets. At banks, the ToneTag technology offers auto-service tokens, details on the counter location, and expected wait time.
ToneTag says that it has onboarded 5 lakh merchants on its payment network, and 14 lakh merchants via its banking partner network. It claims to have enabled 4,500 smart stores and reduced the average checkout time for customers with their technology by 22 seconds. ToneTag says that it has reached more than 20 lakh customers globally, with partners like Yes Bank, Amazon, Mastercard, Reliance, Shopper Stop, and Airtel.
While ToneTag has been around for a while, it gained a lot of traction during the pandemic due to the contactless experiences it is able to offer retail outlets, restaurants, banks, and even supermarkets. It is now working towards making its voice commerce solution more mainstream to enable its customers with more contactless experiences in most places.
Expert opinion: TechArc chief analyst Faisal Kawoosa says, “Voice is definitely a promising UI for future. In fact, we have jumped from touch to voice, bypassing gesture-based UI, which did not succeed much. While it's good, the sound wave payment system needs to be probed more. This kind of tech was introduced in 2010 as well in South America, however, didn't succeed. Also need to see regulatory aspect about this mode of payment.”
Gadgets 360 spoke to Kumar Abhishek, Founder, ToneTag to know a bit more about the company's journey so far and its future plans.
1. What were you doing before you began ToneTag?
Prior to starting ToneTag, I was with Finacle core banking at Infosys Singapore and Europe and have also worked as senior engineer with MindTree and IBM.
2. What brought about the idea of the company?
During my tenure in foreign countries, I observed their payment systems and financial infrastructures and then compared them with India's then-existing digital payment infrastructure. Simply by having exposure to the global financial framework, I was able to spot gaps (opportunities) in the Indian financial sphere. These gaps ranged from poor digital infrastructure to low digital literacy coupled with general inertia against opting for online payments. ToneTag was conceptualised to address these issues by developing products that are safe and easy to use and make digital payments a reality for everyone across geographies.
3. What is ToneTag exactly? How does it help make experiences contactless?
ToneTag was established in 2013 and immediately caught the imagination of a lot of people. The synergy between our technology and the idea was a key factor in our rapid growth and expansion and catapulted us to one of the most impactful technology companies in the world.
ToneTag harnessed some unique capabilities of sound waves and used them to develop frictionless channels of communications between devices. These communications have enabled secure payments and several retail experiences for our partners.
The software algorithm (SDK) encodes data into sound waves which could be transmitted between devices. The only requirement for mobile payments through ToneTag is the integration of the ToneTag proprietary SDK on the merchant (EDC, POS, Phone) and customer (Mobile banking, wallet, payment apps) side. Once the integration is complete, users can make contactless payments at grocery stores and restaurants as well as make peer-to-peer payments from a short distance.
Owing to the highly scalable and interoperable nature of our technology, we were able to build a vast variety of solutions for various industries and sectors. ToneTag technology has been solving multiple problems across various sectors but the most important one is surely the challenge of onboarding people residing in areas of poor Internet connectivity and low digital literacy onto digital payment platforms.
We are tackling this challenge through our ‘Feature Phone' solution, which enables users to make contactless payments through their phones without the need for an Internet connection or dependency on apps. Our solutions are engineered to cater to the entire population. They are not only built to ensure efficiency and safety but also deliver an experience that is seamless and most importantly - uncomplicated. Our ultimate goal is to improve India's digital financial inclusion by enabling digital payments for all citizens regardless of their geographic location or network availability.
Furthermore, we have revolutionised the retail sector and transformed the shopping experience through our audio-based technology. Users can now make contactless payments and inquire about the availability of a product in a store by simply speaking to their devices. We have made the shopping experience quicker and easier and completely eliminated the need to stand in counter queues as users can pay their bills from anywhere in the store. This commerce that occurs through audio-based interactions between users and devices is known as Voice Commerce.
Voice commerce not only benefits the customer but also assists merchants in managing their stores effectively. It automates operations and digitises store management thereby significantly reducing administrative inefficiencies and excessive spending.
4. Does it require data or Wi-Fi to use ToneTag tech?
ToneTag has developed solutions and products that are deployed across sectors and industries. Some of these solutions require internet connectivity at certain levels while others operate completely without the need for Internet or Wi-Fi. For example, the Smart Store solution needs an Internet connection to place online orders for food or groceries while the Feature Phone solution is capable of making payments without the need for internet at any level. Similarly, the need for internet connectivity varies from product to product.
5. While it is a lucrative solution during the pandemic, do you think retail spaces will look at contactless experiences after things are back to normal?
Contactless shopping is not only safer but a more convenient form of shopping, and once customers are accustomed to a new way of shopping that is easier and safer; going back to the old ways is a rarity. So, we can confidently say that contactless shopping is the new norm.
Additionally, contactless shopping also benefits the merchants by providing them with easy store managing and effective transaction monitoring systems that eventually lead to saving and thus improved business. With these factors in mind, we think it is highly unlikely that both merchants and customers will prefer going back to the conventional ways.
6. Describe how your first year in business was like? What are your key learnings from the early days?
Although we began with a good understanding of the market and what we wanted to accomplish, there were a lot of on-the-job challenges and learnings. The biggest challenge being the proliferation of our solution in areas of low digital literacy where people did not trust nor understand digital payments. We were starting from the start and it took a huge amount of time and effort to make small merchants and customers accustomed to digital payments. However, it was heartening to see the acceptance that our tech received from our peers and industry experts.
Moreover, the implementation of our technology by multiple banks and recognition from prestigious entities like RBI, NPCI, and BRICS brought assurance to the world that sound-based transactions are safe and secure. Apart from this, ToneTag has won several global awards and competitions and got several features in leading news portals.
7. Also, outline the year that was significant in terms of business growth ever since you've begun? Why was it so significant?
With regards to growth, we spent the first few years developing our technology, making it robust, and filing multiple patents. Then in 2016, which was a landmark year, we started growing with multiple partnerships. Since then, our trajectory has been one of constant growth throughout the years and the coming year was always better than the previous. The innovations and experience of yesteryears have propelled us to make better products and decisions.
8. Could you detail one success story of ToneTag wherein you deployed your tech in a store and the experience helped the business grow substantially?
We have several instances where our tech has basically recuperated several restaurants and retail stores that were struggling. The pandemic took a disproportionate toll on the hospitality and retail industry, and we witnessed thousands of businesses, especially small restaurants and offline grocery stores, go out of service as people started ordering online due to safety issues. A complete overhaul was needed to bring these struggling businesses back on their feet.
ToneTag reached out and partnered with several small restaurants and transformed them into Smart Dining restaurants. These Smart Dining restaurants started offering cutting edge digital services such as the Digital Waiter, a sophisticated piece of hardware capable of interacting smartly with customers. The Digital Waiter displays the digital menu on the customer's phone, takes and relays the order to the kitchen, keeps customers informed about the status of their order, and also accepts bill payments. A highly ‘touchless' dining experience where customers aren't exposed to multiple surfaces. The safety and convenience benefits encouraged customers to dine in at these restaurants. Additionally, through our online food ordering solution, we increased the visibility of restaurants and connected them to new customers.
As a result of these new features and options, restaurants saw a steady increase in footfall and online orders and subsequently started showing profits. We also reached out to several offline grocery stores and created multiple digital customer interfaces for them. We enabled customers to place orders at nearby stores via the store's link on WhatsApp, thereby connecting merchants and customers through the easiest means possible. We also created a digital storefront for merchants to manage their store inventory and display the items available at their stores to customers. The merchants were given complete control over their online store, and they could make changes in the price, availability, and offer deals in real-time.
Through this solution, customers can place an order without having to download any app and merchants can digitise their store without any expenditure and also cut down excessive spending as they do not have to share revenue with any vendor partner for online orders.
And while we digitise and automate restaurants and stores, our tech does not cause a cut in the workforce. The people working at restaurants and stores are still required to carry their regular roles; our tech simply makes operations easier and more streamlined.
9. How was it like sailing through the unprecedented COVID-19 crisis? How did you deal with the challenges of the lockdown? What was the revenue like last year?
Initially, the pandemic seemed like a cause of concern, but it turned out to be a challenge we were prepared for all along. Our tech helps make a payment simply by voice commands and eliminates the need for physical cash exchange. Furthermore, we enabled queueless and contactless shopping at grocery stores and supermarkets. This is exactly what was required when the pandemic struck: a method to shop with minimum surface contact. We were able to extend our technology to several small stores and supermarkets and started scaling up our operations.
We were also able to form new partnerships as businesses saw the strength of our technology and its ability to deliver results even during the lockdowns. As a result, we were actually able to generate more revenue in the pandemic year.
10. Could you help give a sense of how far ToneTag has come in these few years? From when it began to where it is now.
ToneTag was started less than a decade ago and is counted as one of the most impactful and promising start-ups across the world. In such a short time we have on boarded 5 lakh merchants on our payment network and 14 lakh merchants via our banking partner network, we have enabled 4,500 smart stores and reduced the average checkout time for customers with our tech by 22 seconds.
We have also reached more than 20 lakh customers globally, won several global awards, were shortlisted for the coveted RBI cohort, won eight global patents and multiple grants, developed a fleet of products that are deployed across sectors and industries. We are set to revolutionise the payment and shopping landscape of the world. ToneTag was able to achieve these goals because of the untiring efforts of a dedicated team that ensures the highest level of professionalism and unparalleled dedication towards our goals.
11. Do you have any management mantra/ advice that you'd like to share with future entrepreneurs? What are the big plans for the future?
We are constantly upgrading our solutions and looking to expand into new industries and geographies. We are also focused on making the Voice Commerce platform more sophisticated, efficient, and taking it mainstream. Regarding entrepreneurial advice, I believe the success of a company depends on how quickly it can adapt and keep itself relevant in a rapidly changing market.
12. What is the employee strength of the company? Is ToneTag hiring currently?
ToneTag, being a tech company, is a lean team of 65 members but being in the expansion phase, we are currently recruiting for several positions.