ToneTag triples revenue as soundbox shifts to banking interface

ToneTag, the Bengaluru fintech that uses sound waves to connect payment apps and merchant devices, nearly quadrupled its revenue last fiscal year. The company posted revenue of about ₹210 crore in FY25, up from ₹47.8 crore a year earlier. Net profit rose to ₹65 crore from ₹20.8 crore, according to filings with the Registrar of Companies.

Naffa Innovations Pvt. Ltd, the entity behind ToneTag, was founded by Kumar Abhishek and Vivek Kumar Singh. Services accounted for ₹183.3 crore of disclosed revenue; hardware sales contributed ₹25.4 crore. The company 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 installed base has reached 3 million merchants, with about 150,000 added each month. The system processes 30 million payment-related interactions daily and handles $4 billion in monthly payment value. The company accounts for roughly 15% of UPI person-to-merchant transaction volume over the past year, Abhishek said.

“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.”

Its newest product, eKosha, turns the soundbox into a voice-enabled banking terminal for offline merchants. Merchants can check payments, settlements, and loan balances in a regional language, using an AI programme built into the device that handles some queries locally without an internet connection. The device supports UPI and central bank digital currency payments. It costs ₹1,300-1,500, compared with roughly ₹7,000 for a card machine.

Abhishek said eKosha differs from earlier smart point-of-sale devices because its interface is voice. “Smart POS, the premise was that your MSMEs are technology savvy, which they are not,” he said. Mohandas Pai, chairman of 3one4 Capital and an early backer, said conversational AI widened the opportunity. “Voice could make payments and banking more accessible by allowing users to transact in their own language,” he said. Scaling the technology requires capital, manufacturing, installations and merchant training, he added.

The longer-term opportunity is credit. ToneTag aims to use data generated at the store to make it easier for merchants to furnish information when seeking a loan.

ToneTag’s timing is shaped by a potential shift in India’s digital payments economics. UPI merchant payments have carried zero merchant discount rate since January 2020. A bill passed by the Lok Sabha this month 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.

India had 1.15 crore point-of-sale terminals in May, up from 45.2 lakh five years earlier, according to Grant Thornton Bharat. The country had about 23 million soundboxes by the first half of FY26, including about 13 million deployed by Paytm and 8.5 million by PhonePe, according to Bernstein. Bernstein expects the installed base to reach 40 million by fiscal 2030. UPI processed 24,162 crore transactions worth ₹314 trillion in FY26. Merchant payments accounted for 63% of volume but only about 30% of value, with 86% below ₹500, according to government data.

Qualcomm Ventures invested ₹35.16 crore, or about $3.8 million, in ToneTag in February, following a $78 million funding round led by ValueQuest’s S.C.A.L.E. Fund and Iron Pillar. Qualcomm (QCOM) carries an Alpha Score of 42 out of 100, labeled Mixed, and belongs to the Technology sector. The company’s stock page is available here.

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.