India’s digital payments sector has seen a rapid increase in recent years, driven in part by the government’s unified payments interface (UPI). However, fintech companies were struggling to monetise this growth until payment confirmation speaker devices, like those offered by Paytm, emerged as an innovative solution. The devices’ success has spurred other companies, such as BharatPe, PhonePe, and MobiKwik, to release their own versions, creating a thriving market for payment confirmation speakers.
A vendor, faced difficulties confirming digital payments without literacy skills. A fellow vendor recommended using payment confirmation speakers, which are internet-connected devices that verbally confirm transactions. With the aid of two speaker devices, one from Paytm and another from PhonePe, Ali can now focus on providing better service to his customers.
Initially launched by Paytm in 2019, payment confirmation speakers have found tremendous success among small Indian businesses, including mom-and-pop stores (kiranas) and street vendors. These smart devices are equipped with a built-in SIM card, support multiple Indian languages, and can be easily integrated into a wide range of businesses.
The increasing adoption of digital transactions in India has allowed speaker devices to emerge as a vital revenue stream for fintech companies. By providing a means for these companies to monetise the digital payments boom, speaker devices have become a lucrative proposition. In the third quarter of the 2023 financial year, Paytm’s gross revenue from speaker subscriptions reached $150 million, with 6.8 million devices deployed across the country.
The rapid adoption of payment confirmation speakers has spurred several fintech companies and banks to launch their own devices. Companies like GooglePay have entered the race, piloting Soundpod speakers in India’s kirana stores. Indian banks, such as IndusInd Bank and AU Small Finance Bank, have also launched similar devices, hoping to capitalise on the growing popularity of speakers.
Not only do speaker devices provide revenue, but they also create cross-selling opportunities for fintech companies. For instance, Paytm has expanded its merchant loan distribution due to speaker subscriptions, leading to a 253% year-on-year increase in the third quarter of the 2023 financial year.
Sound devices like speakers also have the potential to drive fintech growth beyond revenue. MobiKwik co-founder Upasana Taku suggests that they could help fintech companies gain deeper insights into transaction patterns and business operations, enabling more targeted marketing campaigns and creating new opportunities for other products and services.
Discussions on Y-Combinator forum on this topic reveal that payment confirmation speakers have been game changers in India, allowing shopkeepers to accept e-payments without interruptions to their work. One user commented, “The device just says the amount received out loud and at that point, the customer can leave with the goods. Haven’t seen this tech anywhere else.” Many small businesses have adopted the technology, even in second-tier cities. Users also mentioned that digital payments in India gained popularity well before COVID-19. One user stated, “It took off because of young generation and costs nothing as simple as that. They forced businesses and other to embrace it.” However, they also noted that the country’s digital payments system can be challenging for tourists and business visitors to navigate.
As the digital payments landscape in India continues to evolve, payment confirmation speakers are poised to play a critical role in transforming small businesses, boosting fintech revenue, and enhancing customer experiences. This innovative solution demonstrates the power of technology to address real-world challenges and unlock growth opportunities in a rapidly changing market.
