Paytm bets big on IoT-driven devices to ease acceptance of payments

Voice-activated point-of-sale machines that work on a SIM card are a hit among small shopkeepers

During a virtual address last October, Prime Minister Narendra Modi spoke to a fruit vendor in Agra named Preeti, who explained to him that a simple device which “speaks out” the amount credited to her account now ensured that “no one can make a fool of us”.
 
While the conversation that day focused on the self-reliance or “aatmanirbhar” pitch of the government, that simple device, Paytm’s Soundbox, is at the centre of the payments company’s Internet-of-Things (IoT) strategy. Simply put, the Soundbox is a voice-activated point-of-sale (PoS) machine that works on a SIM card.
 
Earlier this month, Paytm launched an upgrade to the IoT device, calling it Soundbox 2.0. The new device, unlike its previous version, comes equipped with a digitally enabled screen that gives instant visual confirmation of the paid amount, along with a voice-based response.

 

This has helped build trust in digital payments and, as a result, street hawkers and small shopkeepers have been adopting Paytm’s Soundbox, explains Kumar Aditya, senior vice president for offline payments at Paytm.
 
He adds that the firm took a bet on devices a year and a half ago: “We built our devices on a platform where we can push updates over the air. So, our devices primarily work on Android technology. If there is any upgrade to the software, which can improve the experience with both the merchant and consumer, we can just push the update. Along with that, what it does is that we are able to provide much better service to our merchants, because we know the status of the machine remotely.”

 
The process of fixing the machine, in case it encounters a problem, is similar to getting your broadband connection fixed, where a lot of debugging happens over the phone. This increases Paytm’s ability to service a merchant remotely, reducing downtime significantly.
 
For merchants and vendors who use Soundbox, like the fruit vendor Modi spoke to, the operation is fairly simple. This helps, because many of them do not know how to handle complex functionality in phones.
 
In Soundbox 2.0, merchants can tap the “function button” twice to fetch the payment summary for the entire day. The smart device also allows merchants to record the net amount corresponding to the merchant’s collection, along with voice-based confirmation. It also announces when the device has a full battery life or is running out of charge. The device comes equipped with a 2000 mAh battery, has a SIM card slot and can be operated without a WiFi connection.

 
Compared to the earlier one-time charge of Rs 500 and a monthly payment of Rs 100, Soundbox 2.0 will be available for merchants at a one-time cost of Rs 750 and a monthly charge of Rs 125. Merchants will be able to order it online from Tuesday. The company is targeting 2 million Soundbox 2.0 devices this financial year.
 
Making the move from software to hardware, Paytm was aware of the fact that the latter is a very different play. The quality of devices, for example, has to be optimised to work in Indian conditions, which can be harsh in terms of weather and dust, explains Aditya. The additional upgraded features — a display to show the transaction amount and a battery indicator — were added after receiving feedback from merchants who use the devices.

 
Paytm Soundbox has also incorporated artificial intelligence into the product. Its algorithms are able to streamline each transaction into separate units and help it demarcate transactions from customers individually. Its payment software keeps a record of the entire day’s sale and helps shopkeepers keep a tab on overall sales during the day. It is also connected to the phone app, so that all transactions are updated on a real-time basis.
 
The firm, which has over 900,000 merchants using its IoT devices, is on a mission to bring 50 million merchants into the mainstream economy and equip businesses with 5 million IoT devices over the next few years.

 
Ultimately, says Aditya, the aim is to build trust in the system. “It’s a game that we want to play for long. And we are going to play it well. We are not in a hurry to throw money around and be number one. We will win the game. It’s about getting the quality right, for the user and the merchant. That is the reason why, when a free product like QR code is available in the market, merchants are willing to pay money,” he adds.