What recession? Start Bling nation just raised $ 20 million in Series B funding from Balderton Capital for a new mobile phone payment system. This brings the startup’s total funding to $ 33 million since its launch in 2007.
Bling Nation’s ambitions are to establish a revolutionary and comprehensive payment system for physical goods. This is how it works. The company partners with local banks in very small communities in the United States (where the primary bank is not Citibank or Bank of America). The banks will then offer consumers who use their services a Bling Nation and “Bank” branded chip that can be stuck on any mobile phone device. The chip will allow any user to make a payment directly from their current account similar to a debit payment.
Bling Nation is also partnering with all the local merchants in a given city, to give them special “Bling Nation” credit card machines that will scan chips. The payment device will calculate the number of times a beneficiary has completed a transaction and, as a bonus, automatically award the user coupons, points or discounts, which the merchant will determine. The device will read the chip and deduct the money from a purchase from the recipient’s bank account. Bling Nation even allows merchants to implement a security feature, in which when purchasing, the customer will be required to enter a PIN code for larger transactions.
Currently, Bling Nation is used in two communities in Colorado, including La Junta and Woodland Park, both of which are small towns outside of Colorado Springs. Bling CEO Wences Casares tells me the device will soon be rolled out in cities across the Northwest and Southeastern United States. Bling is in talks with universities and military bases to implement their system.
Bling monetizes the payment network by taking a share of each transaction, which Casares says is very low. The reason Bling’s device is appealing to merchants, Casares explains, is that they can avoid the expensive transaction fees associated with credit card purchases. Even with the debit fees and the Bling discount, merchants end up paying 50 percent less in transaction fees than if the purchase was made through a credit card system.