Bottom-up approach could work better for economy

Even as the government is seeking a formula to tip gross domestic product (GDP) growth past eight per cent, a Bengaluru start-up claims to be working to graduate the country's economic momentum into double-digits.

Juno Tele feels while most national growth strategies are top-down, a bottom-up approach could work better. Like something as elementary as empowering people to spend amounts as small as Rs 65 or lower (less than a dollar!) through their smartphones.

That's right. Just make it easier for people to spend amounts as nominal as Rs 27.75 or Rs 13.20 or even Rs 5.65 from their smartphones instead of fishing for their cards (plastic!) and suddenly the huge population at the bottom of the country's economic triangle (400 million?) could become an empowered micro-spender.

So, how can this become a reality? Tele appears to have a simple answer. When a telecom carrier markets a pre-paid connection (incidentally, pre-paid accounts for more than 80 per cent of all mobile telephony revenues) for Rs 100, it takes quite some time for a subscriber to consume that amount. During that interim period, the money sits with the telecom carrier as an 'advance'. What if, Tele asks, this advance could be temporarily 'drawn' by the subscriber to buy something low-priced off the net through the smartphone? What if the telecom company could charge service fee for facilitating the transaction?

Tele feels this would be like the second coming - sachettisation - of this country's economic liberalisation. It would become possible to price products down to ridiculously odd amounts (Rs 17.39), widening markets. It would liberate people from the pain of putting money into e-wallets and then extracting from these. It would mean that if the telecom carrier considered anyone to be credible enough to use a smartphone, that person would be credible enough to be provided credit as well.

So, where does Juno Tele fit?

The start-up's disruptive technology makes the carrier billing concept a reality. Recognises the credit worthiness of a mobile subscriber as soon as he/she connects. Establishes compatibility across all mobile operating platforms, handsets and technologies (3G, 2G and Wi-Fi) - the only payments mechanism that encompasses all user categories in the micro-payments space. Ensures optimal returns for customers (lower transaction costs) and merchant companies (lower customer acquisition costs). Integrates superior customer experience and convenience with security. Now, if carrier billing is taken out of the mandate of telecom license fees, treated as pass-through revenue, revenue share is replaced with transaction fees and billing verification is enforced (Tele authenticating each transaction within the mobile operator network), then this start-up could be the company to watch.

How am I to believe all this is not a fancy story?

The company commercially rolled this technology out a month ago. Its principal client, India's largest gaming company, moved its non-3G revenues (a segment given up for dead) from a 0.001 per cent to a 4.5 per cent conversion rate within weeks.

If this is what can happen in less than a month in one vertical with one company, work out the national extrapolation.