The burgeoning mobile payments industry has been compared to an unruly jungle. A new technology startup has taken that analogy to heart by developing software it says can transfer information, such as payment details, between devices using communication frequencies used by frogs, dolphins and other animals.
Naratte Inc. on Monday said its Zoosh program could eliminate the need for hardware-based applications, such as near-field communication, by relying on the speakers and microphones already inside smartphones to communicate with other phones and point of sale terminals.
The Sunnyvale, Calif., company said in a press release that its partners are installing the software into various applications and "environments," including "phone-to-phone and phone-to-POS payments, phone-to-POS loyalty systems and digital couponing."
"In order to deliver a secure and reliable data transaction using existing audio subsystems, we had to overcome some incredibly difficult engineering hurdles," Brett Paulson, the chief executive of Naratte, said in the release.
Paulson said one of the company's first customers is SparkBase, a Cleveland gift card and loyalty platform provider that uses Zoosh in a mobile wallet app called PayCloud.
Companies like Google Inc. and Isis, a joint venture of AT&T Inc., T-Mobile USA and Verizon Wireless, are developing services that would allow consumers to make purchases by tapping their smartphones against a payment terminal using near-field communication, or NFC.
However, such systems face hurdles to adoption because they require consumers to have handsets with NFC chips and merchants to have terminals equipped to read NFC signals. Few handsets in the U.S. have NFC chips today, and a small fraction of merchants have the terminals necessary to participate in such systems.
Companies such as Naratte are trying to bypass the technology to get mobile payment systems off the ground without requiring significant investments in new hardware. Other companies taking a similar approach include Square Inc., ProPay Inc. and eBay Inc.'s subsidiary PayPal, which either are marketing or developing services that allow consumers to communicate with retailers within software apps on their phones.
Another company, shopkick, rolled out a loyalty system last year that lets consumers earn rewards points for entering stores by sending special signals to their phones. Merchants that use the system must install special devices inside their stores that can communicate with the consumers' handsets.
Target Corp., American Eagle Outfitters and other retailers use the service.
