Paytm, PhonePe Are Testing Playing Ads on Payments Sound Boxes

Payments soundboxes have become ubiquitous since they were introduced by Paytm a few years ago, but now they will serve a purpose other than simply letting shopkeepers know that they’ve received payments.

Paytm and PhonePe are testing audio ads on sound boxes at retail stores, ET reports. FMCG companies including Cadbury’s parent Mondelez and Tata Consumer Products are participating in the pilot. The ads run after every few transactions at the sound box, in addition to the confirmation message about the payment.

“The way it is being worked out is that there will be a 4-5 second audio spot that will run after every few transactions on the soundbox. The experiment is being conducted with retail grocery stores in some cities with FMCG and CPG (consumer packaged goods) brands,” ET reported a source as saying.

“The mechanics of this are still being worked out…there could potentially be discounted device rentals for merchants opting in for advertisements. If the opportunity becomes big enough down the road, revenue share with merchants is also not out of the question,” the person cited above said, adding that the details are still being worked out. “For merchants, especially small groceries and mom-and-pop stores, the proposition being given is that these ads will be relevant for their consumers and could also result in increased sales for them,” they added.

This could prove to be a pretty clever way for payments companies to monetize their soundboxes. There are now millions of soundboxes scattered across the country, and they play the same message each time a payment is received. However, if they can play ads every now and then, they could end up becoming a pretty large media platform — it’s possible that these ads could play hundreds of millions of times every day. The ads can also be localized as per the location, and be targeted towards income groups that shop at particular stores — the ad, for instance, at a village kirana store can be different from the ad that plays at a swanky supermarket in a metro. Also, the ads will appear unique and fresh, at least for the first few years, and can break through the existing media clutter.

However, other efforts to monetize similarly large platforms haven’t quite worked out. Ola had once begun showing ads within its cars, but the program was quickly dropped. Also, the Sound box ads will play after a transaction is complete and the customer is ready to leave, so impulse purchases from the initiative might not materialize. And marketers will likely be unable to accurately measure the impact of these ads, so it could be hard for them to ascribe a value to the campaign.

But Paytm and PhonePe are reportedly trying out running ads on their soundboxes, so they clearly feel that there’s potential for monetization here. And if the pilot is successful, they might’ve created a media category out of thin air. The soundboxes were an India-specific innovation when they were first introduced, and helped shopkeepers fight fraud from customers who sometimes used screenshots and fake apps to claim they’d made payments. But even as the sound boxes elegantly solved the fraud problem, they didn’t quite bring a windfall for the companies that had come up with the idea. But if millions of sound boxes could end up being a media property as a whole, the companies could ultimately end up being rewarded for coming up with a product that didn’t exist anywhere in the world.