A soundbox has become a fixture at India’s small shops. Now ToneTag, a 13-year-old Bengaluru company, wants to turn the humble payment-alert device into a banking interface—and eventually a gateway to credit.
The timing matters. Unified Payments Interface (UPI) merchant payments currently carry no merchant discount rate (MDR). But a bill passed by the Lok Sabha allows the government to notify charges on specified digital-payment modes. If merchant payments begin generating fees, the device sitting on the counter could become more than a cost of acquiring a merchant.
Naffa Innovations Pvt. Ltd, the entity behind ToneTag, was founded by Kumar Abhishek and Vivek Kumar Singh. It uses sound waves as an additional way for payment apps and merchant-acceptance devices to exchange data. It raised ₹35.16 crore, or about $3.8 million, from Qualcomm Ventures in February, following a $78 million funding round in February 2025 led by ValueQuest’s S.C.A.L.E. Fund and Iron Pillar.
Abhishek describes the opportunity through the evolution of the plastic card. The card and terminal have changed little over three decades; what evolved was the protocol that allowed them to communicate, from magnetic stripe to chip and then tap payments. Payment apps, he argues, never developed a comparable layer.
In a QR payment, a customer scans a code displayed by the merchant and the app sends the request through the banking and UPI network. ToneTag says its software in the app and merchant device enables an encrypted sound-based exchange of transaction data.
“A lot of that is processed locally rather than through the internet,” Abhishek said.
The company says this also provides a check against fake QR stickers pasted over genuine merchant codes, which can redirect payments to a fraudster’s account. ToneTag says its protocol can identify a mismatch and stop the payment, a claim that Mint could not independently verify.
Sound-based payments are not new to India. Google’s Tez, the predecessor to Google Pay, used proprietary Audio QR technology in 2017 to pair nearby phones through ultrasonic sound before completing the payment over UPI.
ToneTag says its technology is deployed across 3 million merchants, adds about 150,000 a month, processes 30 million payment-related interactions daily, handles $4 billion in monthly payment value and accounts for around 15% of UPI P2M transactions over the past year.
“We operate at the infrastructure and data layer, and charge for both,” Abhishek said. “We are a technology solutions provider, not a payment processor or a regulated entity such as an issuer or acquirer.”
According to filings with the Registrar of Companies, revenue rose to about ₹210 crore in FY25 from ₹47.8 crore a year earlier, while total expenses increased to ₹135 crore from ₹27.1 crore. Net profit rose to ₹65 crore from ₹20.8 crore.
Services accounted for ₹183.3 crore of disclosed revenue and hardware sales for ₹25.4 crore. Yet ToneTag added about ₹129 crore of point-of-sale equipment to fixed assets and recorded about ₹43 crore in depreciation. Its accounts say the equipment may be sold or retained and leased or rented to merchants.
ToneTag’s newest product, eKosha, seeks to turn the soundbox into a voice-enabled banking interface for offline merchants. Merchants can use a regional language to check payments and settlements, or ask about loans, overdrafts, cheque books and government schemes.
“It’s literally the way banks brought ATM as an extension of banking for us,” Abhishek said. “Similarly, eKosh is a banking extension for our MSMEs.”
ToneTag says the device has a specific artificial intelligence (AI) programme built into it, allowing it to handle some voice queries locally instead of relying entirely on a remote server or the Internet. It supports UPI and central bank digital currency (CBDC) payments. The company says it costs ₹1,300-1,500, against roughly ₹7,000 for a card machine.
