Bangalore-based, offline proximity based mobile payment solutions startup, ToneTag, raised $1 Mn in its first round of funding from Reliance Capital’s Venture fund arm. Besides, Investment Banking firm Multistrato Capital Advisors was the financial advisor for the deal.
The startup plans to use the funds in hiring Technical and Sales & Marketing resources for influencing user adoption and Sales to enable merchants accept cashless and cardless transactions.
ToneTag is a mobile payment solution startup that allows easy, frictionless & secure mobile payments using soundwaves (Tone) or NFC (Tag) and enables mobile device to make payments without the need of internet. The startup enables contactless payments in the existing payment ecosystem by integrating its proprietary software development kit at both Merchant (mobile,POS,EDC) and Customer interaction points (M-Wallet, M-Banking Apps).
The company started its operations in 2013 under former Infosys employee, Kumar Abhishek along with Vivek Kumar Singh with clutch of Angel Investors like Ram Sellaratnam and Rajesh Yohahana. ToneTag aims to reach 50,000 merchant devices and 1.8 million customers across the country by next year.
How does it work?
Depending upon user’s device and retail pos hardware, mobile application can toggle to initiate in-store purchases using sound (Tone) or NFC (Tag). It works on any mobile device bridging the last mile in making mobile transactions with the internet connection.
According to Kshitij Gupta, Fund Manager, Reliance Venture Asset Management, “ToneTag provide a frictionless offline mobile payment solution to the customers which offers both convenience and security. The consumer now has the ability to make payments directly from their mobile phones using their existing m-wallets, card on file, card present (HCE) and direct bank transfer options. We believe this product enriches the transaction experience of the consumer and will assist in changing the proximity payment landscape”
At present Mobile Payment Industry is missing out on a tech, which can enable frictionless payment at the last mile. Tone Tag believes that if users have to pay using mobile then the whole experience of payment needs to be either similar or better than card or cash payments. NFC does enable a good user experience but it has extremely low penetration roughly less than 7% globally. ToneTag plans to target more than 25 million Indian mobile internet users, as reported by Internet and Mobile Association of India (IMAI), by allowing them to make payments through their mobiles.
NFC based mobile payments is in a nascent stage in India, with players like iKaaz and LivQuick. iKaaz, which earlier raised seed investment from a group of angel investors is on a look out for Series A fundraise, whereas, LivQuick, which manages mobile payments for retail and F&B sector, raised $1.6 Mn last month. In the matter of concern RBI had also advised the banks to explain NFC technology to customers after it allowed single factor authentication regime for transactions upto INR 2000.
ToneTag has been a part of InTech50, a platform to showcase innovations to visionaries and had also won the GREAT Tech Rocketships Initiative 2015, organised by UK Trade & Investment (UKTI) in partnership with Indian Angel Network and other Tier I Investors.
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