Payments

Can Microsoft's soundwave based payment system Dhwani be a threat to NFC enabled devices?

MEDICIFounder and Chief Strategy & Innovation Officer

Microsoft which is having a troubled time with Windows, its phone's and software sales has come up with their latest research which enables NFC like communication over sound waves. This innovation has been named as Dhwani and is currently in the testing phase.

Microsoft earlier this month went public that they have found an alternative to the current NFC based payment system. The reason behind this innovation according to Microsoft is the slow penetration rate of NFC which is about 3 to 5% globally. Since its inception the prevalence of NFC enabled Point of Sale (POS) terminals is still between 800,000 to 1 Million terminals in USA.

Microsoft states that NFC based devices are still in their early stages and merchants are finding it difficult to accept payments over NFC enable phones and readers. Mainly because of the need to buy special hardware and replace the existing debit or credit card readers. NFC enabled devices require a special hardware to interpret the messages sent over from an NFC enabled phone.

Dhwani operates on a sound wave principle and doesn’t need special hardware to send or receive messages but needs a phone which has basic features like a speaker and a microphone. The USP of Dhwani is a security feature called JamSecure which uses self-interference cancellation technique to choose and process appropriate sound signals at the receiver, making transactions secure.

DhwaniSource: Microsoft

LTP View: Dhwani seems to be an interesting concept. Infact a similar sound wave system has been brought to light by Verifone. Verifone has come up  with a patented sound based NFC-like payment system called Zoosh technology and is currently operational in NYC through a mobile payment app called Way2ride. A slight drawback of Dhwani and similar proximity payment systems is their need to keep the phones at the proximity of around 10 cm to send and receive messages. The other flip side of Dhwani is the low data processing rate which reaches up to 2.4 Kbps. We’re yet to see if Dhwani has the potential to outgrow the existing NFC enabled devices due to its low-cost of acquisition.

Click here to download a whitepaper on Dhwani.

Amit Goel

MEDICIFounder and Chief Strategy & Innovation Officer

“Amit Goel is the Founder & Chief Strategy & Innovation Officer for MEDICI. Amit’s vision is to build a strong FinTech market network that involves financial institutions, banks, startups, investors, analysts & other key stakeholders across the ecosystem – helping each one of them in a meaningful way by removing the asymmetry of information and providing a platform to engage & transact.\ \ Amit is passionate about bringing actionable FinTech-focused insights, innovative products & services for the FinTech ecosystem. Some of his work involves startup scores, bank scores/assessments, predictive viewpoints & other innovations that have helped MEDICI’s customers and the ecosystem. He has been named amongst the Top 100 FinTech thought leaders/influencers in the world & Top 10 in Asia multiple times by reputed agencies, consulting firms as well as financial institutions. Amit has built MEDICI (formerly LTP) as a new-age, tech-enabled advisory/research firm, which is now considered the #1 global research & innovation platform for FinTech in the world.\ \ Amit has been writing pioneering viewpoints on financial technology space that have been ahead of the curve since 2010. His data-driven predictions have helped the customers as well as the ecosystem. His past work experience includes a strong background in strategy & market analysis and advisory to clients (from big business houses to Fortune 500 firms) in payments, commerce, financial services & IT/technology. In the past, Amit had also founded a successful consulting & research practice called GrowthPraxis and has worked at Boston Analytics, Frost & Sullivan, and Daimler Chrysler in strategy & research.”