Hong Kong is often in the news for all the wrong reasons. What most HK residents would probably want you to know is just how much they love their city. Politics aside, when nearly 28% of a city’s population takes to the streets to protest at the same time, it tells you something. These people are not fighting something they hate, they are trying to save something they love.
At the top of the list of reasons to love Hong Kong would be efficiency. No better example of that can be found than the ubiquitous Octopus card. It’s a charge-as-you-go RFID chip that can be carried as a card or embedded in a watch or bracelet and accepted nearly everywhere. Sure, London has the Oyster card, but the Octopus card dominates in the large number of retail chains that have adopted it.
In the above photo, you can see the two basic components of a contactless payment system – the reader and a chip that’s embedded in a device such as a card, watch, or even a piece of jewelry.
Now, imagine a world where you can make a contactless payment using the technology found in any smartphone. It’s something being worked on by a startup called LISNR that’s using sound waves for contactless payments.
LISNR – Payments Over Sound
Founded in 2012, San Francisco startup LISNR has taken in $29.4 million in disclosed funding from names like Japanese mobile giant NTT DoCoMo, Intel, and Visa. All that funding is being used to develop LISNR’s ultrasonic data-over-sound technology which enables proximity verification and contactless transactions for merchants of all types. The company first came across our radar in a 2017 article we published titled How Audio Beacons Monitor You Via Smartphone. Then, a few weeks ago, LISNR announced a strategic investment by Visa for an undisclosed amount which is expected to accelerate the adoption of touchless transactions, something that’s in demand lately due to “the Rona.”
We’ve talked before about how ultrasound technology is being used for a variety of medical applications, not just for seeing what your future bundle of joy looks like. Simply put, ultrasound refers to high-frequency sound waves that humans can’t hear. Data-over-sound technology means we use ultrasound to transfer data between two devices simply by using a speaker and a microphone. One application for such a technology is payments.
Contactless Payments and Smartphones
Think about how many cards you carry around in your wallet and purse and consider how many might be replaced by an app on your smartphone. Just over 60% of shoppers use their smartphones when shopping, and one can only assume that the vast majority of smartphone users don’t go anywhere without their phones. It makes sense that ultimately the smartphone will become the optimal method of conducting contactless payments.
A white paper by LISNR proposes that there’s more here to this contactless method than just convenience. The example they give is Starbucks, a company that holds more cash than many banks do. As of a few years ago, Starbucks was the leader in mobile proximity payments, though they’ve recently been edged out by Apple Pay.
LISNR argues that merchants should own their own payments in the same way Starbucks has. Since the U.S. lags when it comes to using mobile phones for payments, now is the time for merchants to own this space. Here’s a look at how under-penetrated the U.S. is at the moment when it comes to mobile payments.
The idea is that merchants can use LINSR’s technology to create payment solutions easily without having to make investments in hardware. Then, they can facilitate payments through an app which can also personalize the entire customer experience.
One could argue that Starbucks only became popular because of a first-mover advantage. Over time, a more mature market would gravitate towards one or two dominant payment providers. This is the case in China, where Alipay and WeChat Pay have a combined share of 94% of mobile payments. Even if payments don’t take off, LISNR’s technology can be used for many other use cases where smartphones need to talk to each other for the purpose of removing friction from transactions.
Sonarax – Contract Tracing
LISNR claims to have filed some of the first patents relating to the use of data-over-sound. One company that’s probably keeping close tabs on LISNR’s patent portfolio is Sonarax, an Israeli firm that’s taken in $4 million in funding to develop any number of use cases for data-over-sound. The dominant one at the moment is unsurprisingly an enterprise contact tracing platform called SONAR-XE.
An article by Forbes talks about how Sonarax claims to be the first company in the world to have demonstrated a viable ultrasonic indoor navigation system that can work while a user is moving. It’s just one of many solutions proposed by Sonarax such as physical presence verification.
Physical Presence Verification
One could argue that Uber is the ultimate invisible payment solution. Once you’ve attached a credit card to your Uber app, you never have to think about payments again. The same holds true for food delivery apps. In both of these use cases, there are instances where you want to verify that both parties are interacting. Drunk people getting into the wrong Uber has resulted in at least a few incidents involving criminal acts. In the case of food delivery, it’s easy enough for a customer to say they never received their food, and it’s their word against the driver’s word. The customer is always right. LISNR has actually deployed solutions addressing both of these use cases.
Think about what other apps you have on your phone that might benefit from data-over-sound. For example, Airbnb hosts often ask their guests to notify them upon successful check-in. Wouldn’t the ultimate check-in be a door lock that opens when the guest approaches the door, and at the same time notifies the host that check-in has completed successfully?
Staying with the travel use case, visitors to many countries now have to undergo mandatory quarantines. In Hong Kong, new arrivals need to wear wrist bracelets to ensure they’re not sneaking out for dim sum during the 14-day mandatory quarantine. That same smart door lock might also be able to ensure that mandatory quarantines are completed in countries where that’s required. Smart locks are just one of many Internet of Things (IoT) use cases for data-over-sound.
TrillBit – The Internet of Sound
Founded in 2017, Bahstun startup TrillBit has taken in $200,000 in disclosed funding to develop applications for data-over-sound in the wide world of IoT. Oftentimes when you look at a startup’s stale web presence, you wonder if things fizzled out, or if the company is so busy executing that the website is prioritized last on their to-do list. For TrillBit, it seems to be the latter. Startup newsletter The Buzz wrote about TrillBit this spring saying that their product “is live in over 2 million devices and has pilots with some of the biggest names in tech which can give it a reach of up to 50 million devices.” TrillBit is presently looking for advisors in real estate and access control and, of course, investors, who will be encouraged to hear that there’s been at least one exit in the data-over-sound space.
Chirp – A Data-Over-Sound Exit
Investors in the startups we’ve talked about so far should feel validated by the exit of a U.K. data-over-sound startup earlier this year. Founded in 2011, London, England startup Chirp had taken in $1.3 million in funding before being acquired by Sonos (SONO), a $2.3 billion publicly-traded manufacturer of audio products. Prior to that acquisition, Chirp had been up to some pretty cool stuff.
The first example is the smart toys Chirp developed with Hijinx for the Emmy-award winning Netflix TV series Beat Bugs. The show was able to communicate with the toys so that they sang along as the TV show was being displayed.
Credit: Hijinx Toys
Another cool application was the work they did with Activision for the Skylanders console game. Essentially, the game would send characters to your smartphone so you could modify them with an app. How cool is that? The final example was the work they did with EDF Energy in nuclear power stations where radio frequency communication is banned, eliminating the possibility of popular technologies like Bluetooth or Wi-Fi.
Over the course of researching this article, we came across quite a few companies dabbling in data-over-sound, some of which didn’t make that their sole focus. This isn’t meant to be an exhaustive list, but rather a sample of the use cases data-over-sound can be applied to. If your sacred cow didn’t make it into this article, drop us an email and we’ll introduce you to our affordable content marketing offering. Skip PR firms and help support the people doing the heavy lifting.
The ability for two devices to securely communicate using nothing but a speaker and a microphone opens the door for a wide variety of use cases, many of which haven’t even been thought of. Companies like the ones we’ve discussed are all trying to find a niche where they might dominate with their own flavor of data-over-sound technology.
Ultimately, it may come down to whose intellectual property portfolio stands up in court. Hopefully, we’ll see some consolidation happen rather than money being wasted on long-winded solicitors.
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