The burgeoning mobile-payments industry has been described as an unruly jungle. A new technology start-up has taken that analogy to heart by developing software it says can transfer information, such as payment details, between devices using communication frequencies commonly used by frogs and other animals.
Naratte Inc. on June 20 said its Zoosh program could eliminate the need to base mobile-payments systems on 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.-based 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, Naratt chief executive, said in the release.
One of the company’s first customers is SparkBase, a Cleveland-based gift card and loyalty-platform provider that is using Zoosh in a mobile-wallet app called PayCloud, Paulson said.
Companies such as Google Inc. and Isis, a joint venture of AT&T Inc., T-Mobile USA and Verizon Wireless, are developing services that would enable consumers to pay for purchases by tapping their smartphones against a payment terminal using NFC. However, such systems face hurdles to adoption because they require consumers to handsets that contain NFC chips and that merchants 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 PayPal subsidiary, which either are marketing or are developing services that enable consumers to communicate with retailers within software apps on their phones.
Another company, Shopkick, rolled out a loyalty system last year that enables consumers to 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.
