Most new-age, mobile-first companies from Silicon Valley find it easy to attract consumers in emerging markets such as India but hit a wall when it comes to getting them to pay for products and services.


So when a Bengaluru-based startup offers a payment solution – and one that doesn’t require credit cards or the Internet – large players including Facebook are bound to be interested.“They (Facebook) have shown interest in using our product,” said Sekar Rao, Chief Executive Officer of JunoTele, which has patented a way for users to pay for digital goods from their mobile talk-time account.


Rao, 49, said executives from Facebook’s Singapore office had spoken to him about aspects of his company’s product, including the core offering – direct billing from carriers. Facebook declined to comment.


JunoTele bypasses credit cards and the Internet by using a telecom operator’s signal to carry out transactions – the same one that’s used to make regular phone calls.While other companies offer a similar solution, they depend on a robust Internet connection to car ry out a part of the transaction. JunoTele’s technology, which sits within the fortress of telecom operators, was granted a US patent this year.


The product may fill a critical gap in emerging markets, where a large segment of the population does not own credit cards. Even when there are transactions, the high processing fee on credit cards ensures that developers earn little on the products they sell.


“The opportunity of payments is significant in the emerging markets,” said Mohammad Chowdhury, telecom leader at PwC India.But he pointed out that the technology is not new and that mobile operators such as Airtel have used this form of billing to charge customers for selling ringtones.


JunoTele contends that operators had the ability to do that because they possessed a user’s number. “But when I move to WiFi, Airtel or Vodafone cannot deduct from my balance, as they don’t have my number. We help them identify that. That’s the real value,” said Rao. a graduate of the Indian Institute of Management in Bengaluru,
Rao set up JunoTele in 2011 after a four-year stint at Luxembourgbased telecom exchange Mach.Headquartered in Bengaluru, JunoTele’s 30-member team has five global customers and is eyeing a turnover of $3-5 million (Rs 18-30 crore) next year. The company declined to identify the clients.


Research firm App Promo said in a report in 2012 that 59% of the apps don’t generate enough revenue to break even on development costs. Rao claims JunoTele increases an app developer’s addressable market by 10 times – expanding its scope beyond just smartphone users.


Globally, there are a few precedents in the larger direct carrier billing space. Italy-based Onebip and California-based Zong and Boku are a few instances. More recently, Estonia-based Fortumo Payments ventured into Singapore and after having established offices in Mumbai and Delhi.