Coda Payments: Using airtime as a digital wallet

Coda payments is revolutionizing the mobile payments industry today. Similar to players such as Bango, Coda offers carrier or airtime billing, a solution that allows users to pay for services using the mobile prepaid balance or what is also called the airtime.

Coda was founded by Neil Davidson, Bobby Choi and Paul Leishman. Coda is backed by investors such as Venture Labs, Digital Media partners, Golden Gate ventures and Toivo Annus. Golden Gate ventures has invested $12 Mn in a fund which has been invested in 3 startups, Coda Payments being one. Coda payments is currently targeted at users in the emerging markets such as Indonesia and Malaysia and is headquartered in Singapore.

In Indonesia Coda has partnered with a mobile operators Axis telecom which has a customer base of 20 Mn to launch the service under the brand PulsaQ. Coda has plans of spreading its footprint to other South East Asian countries such as Vietnam and Thailand.

Coda services the end customer and at the same time addresses the needs of the mobile operator by helping them maintain a sophisticated margin differentiation program.

Coda has become popular in a short span of time as it allows users who do not possess credit or debit cards to purchase digital goods i.e. e-content, information services etc.

Coda's design uses an API for merchants, and the potential to unlock some use cases which would work out profitable for all parties. The application charges merchants minimally for the transactions and the rest are shared with the mobile network operators. The users are completely not charged for the transactions. The users are prompted for their phone number which triggers an SMS with the confirmation code.The users then reply with the confirmation code to confirm their purchase.

The USP of this solution offered by Coda is that the user need not enter their credit card information online or is required to make an ATM transfer. Instead the user just tops up his mobile prepaid card and can use the same to make payments for purchasing digital content. Also Coda maintains its own merchant management service i.e. allows for operators to negotiate, price and manage multiple relationships with merchants.

Square is one of the competitors in this space of carrier billing operating in the US. Bango, a partner of Facebook is another company in this space providing carrier billing.

LTP View: Coda is the one of the few players to offer airtime payment solution and the first to offer this solution in South East Asia. It has expanded its reach to Malaysia & Indonesia. It has the potential to tap other emerging markets as India and China. The next step in the growth of this company is to expand its collabaration with all telcos in the given geography and making the purchase of digital content online as easy as possible.