Startup has ultrasound alternative to NFC

SAN JOSE, Calif. – Startup Naratte Inc. has disclosed a technique for sending information via ultrasound using existing speakers and microphones in consumer devices such as smartphones. It is working with partners to enable applications such as mobile payments.

The startup's technology called Zoosh is positioned as an alternative to near field communications, particularly good for enabling via a mobile app existing systems that do not support NFC.

A company called SparkBase is already using the technology for a mobile wallet application called PayCloud. Other applications in the works include phone-to-phone and phone-to-POS payments, phone-to-POS loyalty systems, digital coupons and fast Bluetooth pairing.

The company is currently focused on closed, single company applications such as loyalty and gift cards. As it demonstrates success, it hopes eventually to attract the interest of banks and credit card companies now lining up to support NFC.

"We need to prove our technology across different apps and then the [open] transactions will come," said Brett Paulson, co-founder and chief executive. "We know NFC is coming, but there is always room for another short range wireless system," he said.

Paulson said the technology can enable NFC like apps in existing phones that lack an NFC chip or new handsets that do not want to take on the added hardware cost of NFC.

The approach uses audio frequencies inaudible to humans, created using proprietary transforms and algorithms created by Naratte (pronounced to rhyme with karate). The audio is played as a standard MP3 file over a limited distance using a unique and perishable transaction ID.

The startup has designed a $30 docking station that plugs into some existing point of sale terminal to enable audio capture and decoding. Many POS terminals are based on PC-like motherboards that support audio and only need a $2 speaker/mic adapter, Paulson said.

The company focuses on supporting distances of about six inches for transactions that typically require a thousand bits, but notes that longer distances can be supported depending on the particulars of existing hardware which varies widely. The company has tested about 50 phones so far and has not found audio frequency response an issue for any handset that can support MP3 playback.

Naratte is adopting a flexible business model to align with its customers. Thus it charges either a one-time licensing fee or a per-transaction royalty.

The startup faces a host of challenges. It must convince third parties to adopt its technology at a time when many of the big banks, credit card companies and mobile giants are jumping on NFC.

Potential partners will scrutinize closely any security scheme used for payments. To succeed, Naratte will have to build its own ecosystem and likely create at least a de facto standard around its technology.

To its credit, Naratte gathered general statements of support from a handful of influential people.

"Zoosh has the potential to enable complete consumer merchant shopping experiences," said Laura Chambers, general manager of PayPal Mobile, noting the low cost of deploying the technology.

"This is one of the most creative uses of [wireless] technology that I've seen," said Matt Muse, general manager of C5000 DSPs at Texas Instruments.

"Being able to easily enable transactions among all types of mobile devices within the true proximity from each other, all done through a pure software-based solution, is incredibly powerful," said Fay Arjomandi, head of US R&D for Vodafone Group.

Naratte (Sunnyvale, Calif.), was founded in May 2009 and has 12 employees. It received $5 million in funding from an unnamed investor and has eight patents pending. It has posted a demo online.