Start-up Coda Payments is targeting Asian markets with a new service that enables mobile subscribers to pay for digital goods from their prepaid airtime account. Its first launch is in Indonesia with mobile operator Axis.

The service works with any handset and is designed to make online transactions easier in a market where credit and debit card ownership is low but a vast majority of mobile subscribers have prepaid accounts.

Axis has 15.8 million subscribers (end-2012 figures) and is the country’s fifth largest operator, according to Wireless Intelligence figures.

Coda’s CEO Neil Davidson told The Next Web that the firm’s initial focus was Indonesia where it wants to build partnerships with online merchants and other operators but is also talking with operators in Malaysia.

The venture capital firms backing Coda also have connections in Vietnam and Thailand, he said.

Coda’s business model is to charge an (undisclosed) percentage to merchants for processing a payment, and then keep some of the fee before handing over the balance to the operator.

Indonesian subscribers using Axis’s service select an option on a participating merchant’s website during a transaction and are prompted to provide their mobile number. Then they receive an SMS containing a confirmation code to which they reply, which completes the transaction. A sum is then taken from the balance in their prepaid account.

Participating merchants in the country include Indonesia’s largest ebook store Papataka, as well as comic book distributor Ngomik.com and games publisher Asiasoft.

Both Neil Davidson, the CEO, as well as Paul Leishman, Coda’s COO, formerly worked for the GSMA.