Some of India's biggest fintech startups are making deeper inroads into soundboxes, unveiling a new push to the pocket-sized devices whose chimes are fast becoming the new "ka-ching" for millions of Indian merchants.
Paytm, whose soundbox leads the market and is used by over 7 million merchants, launched an advanced version of the device that doubles as a card machine, accepting offerings from RuPay, Visa, Mastercard and American Express.
In the new Soundbox, Paytm has found a way to make the conventionally costly point-of-sale (POS) terminals accessible to a larger group of merchants. Instead, it’s capitalizing on the tap and pay feature, enabling cardholders to complete transactions up to $60. Most cards offer this tap and pay capability, and a significant portion of card transactions fall within the $60 limit. (Scores of Android smartphones also support card usage via the tap and pay feature, which will work with Paytm's device.)
Even with a 30-year presence of cards in the South Asian market, a mere 4 million shops entertain them. In contrast, soundboxes have already made their mark in 8.5 million stores and are on a rapid ascent.
Paytm said its new soundbox, which is priced at 999 Indian rupees ($12), supports 11 languages, features a display and 2,600 mAh battery that will allow the device to last for up to 5 days on a single charge.
The soundbox, whose bill of materials cost less than $20, is rapidly becoming an emblem of digital transactions in various Indian retail settings. Its audible confirmation feature is particularly popular in marketplaces and cacophonous street corners, instilling trust and confidence in both sellers and buyers regarding payments transactions.
Moreover, the soundbox has evolved into a lucrative subscription model over time as companies like Paytm and the Walmart-backed PhonePe impose nominal subscription charges on merchants. The real allure of the soundbox extends beyond its auditory alerts — it provides invaluable insights into merchant behaviors, facilitating the offering of loans based on this data, which is also increasingly now piquing the interest from banks.
Banks were earlier hesitant in chasing the QR or soundboxes market in India because they felt that there is no money to be made in the category. Firms like Paytm proved a business case of lending by assessing merchant's cash flow and transactions, similar to Square's play in the U.S.
The all-in-one Soundbox will "propel payments and consumer choice to the next level," said Rishi Chhabra, VP and Head of Merchants Sales at Visa, at a press conference Monday.
"Paytm has always been at the forefront of innovating for India’s small businesses, solving their payments and financial services problems," said Vijay Shekhar Sharma, founder and chief executive of Paytm. "Today with Paytm Card Soundbox, we take it to the next level. We have found that merchants and consumers need card acceptance as simply as mobile payments with Paytm QR Code. "
The push makes Paytm's card offering more compelling to fight point-of-sale machine offerings from Pine Labs and banks.
Pine Labs, backed by Peak XV and Fidelity, interestingly has unveiled a new POS machine, adding some soundbox alert features. The startup said its new device costs a third of the standard terminal machines, but didn't elaborate.
PhonePe, a rival to Paytm, also unveiled an update to its soundbox, saying merchants can now receive the notification in the voice of Bollywood legend Amitabh Bachchan. Reliance, India's largest firm, is also testing a soundbox at its campus, TechCrunch reported earlier.