M-payment network Bling Nation halts service to retool business model

Bling Nation has shut down its mobile payment and loyalty services while it overhauls its business model, a measure the startup insists is only temporary.

Bling Nation said it will roll out a revamped product later this year: "We found it was easier to kind of pause and fix [the service] than to try to tweak and market," said Bling Nation general manager Matthew Murphy in an interview with American Banker. Murphy declined to divulge specifics on the firm's plans.

Bling Nation's signature BlingTags--quarter-sized microchip stickers that affix to any mobile device--enable consumers to pay for purchases at participating retailers regardless of their phone's manufacturer or operating system. BlingTags link directly to a customer's existing PayPal account, debiting purchase totals without sharing personal information and transmitting real-time, SMS-based confirmation messages following each transaction. Bling Nation supplies each retail partner with a RFID reader terminal, BlingTags and marketing materials, also promising transaction fees substantially lower than standard credit card charges.

Last fall, Bling Nation introduced FanConnect, a loyalty program enabling consumers to "like" a merchant on Facebook and redeem targeted offers and discounts. Although Bling Nation later made FanConnect optional, at launch the firm required bank and retail partners to join the premium program, prompting many to jump ship.

"It was either you're on or you're off, and a lot of our merchants said, 'Okay, we're off,'" said Brad Rose, vice president of information technology security at State Bank, Bling Nation's earliest bank partner. State Bank stopped issuing Bling Tags in March.

Near Field Communications-based contactless payment transactions are expected to reach nearly $50 billion worldwide by 2014 according to a forecast issued last week by Juniper Research. Based on internal analysis, as well as interviews with industry players, Juniper anticipates NFC-based mobile payment services will launch in up to 20 international markets over the next 18 months, with North America and Western Europe together accounting for 50 percent of the worldwide market by 2014.

Even with Bling Nation out of the mix, mobile payment efforts in the U.S. market still include Isis, the joint venture established by Verizon Wireless (NYSE:VZ), AT&T (NYSE:T) and T-Mobile USA in late 2010, as well as Google (NASDAQ:GOOG) Wallet, which aligns the digital services giant with U.S. network partner Sprint (NYSE:S) and financial services providers MasterCard, Citi and First Data, to enable subscribers to purchase goods and redeem coupons and loyalty rewards via Android smartphones. Mobile payments startup Square recently announced it now processes over $3 million in transactions a day, although its application relies on a smartphone dongle attachment, not NFC.

For more:
- read this American Banker article

Related articles:
Forecast: Contactless payments to reach $50B worldwide by 2014
Google takes command of m-commerce race with digital wallet launch
Square processing $3M in mobile payments every day
AT&T: Debit card regulations forced new Isis m-commerce strategy