Bling Nation goes "bling-bling" with $8 mln

Startup is enabling consumers to make purchases using their cellphones as debit cards

Imagine a day when you won’t have to carry around a wallet anymore.  Everything you need is digitally stored in your Smartphone, including your cash.  So you walk to a register with some groceries, scan your phone at the checkout, and receive a text message receipt with transaction information, an updated account balance and rewards balance.  

Startup, Bling Nation, is well on the road to bringing this to a widespread reality, receiving $8 million in Series A funding today.  The round was led by Lightspeed Venture Partners, and joined by Camp Ventures and Mack Ltd.

Based in Palo Alto, Ca., Bling Nation is teaming up with banks nationwide to act as a payments service provider, stepping up head to head against credit card giants Visa and MasterCard.  In Bling’s case, it is trying to help local merchants not have to use a global payment networks for their transactions.  The company says this reduces merchant processing costs and increases bank revenue.  

In order for this transaction model to take place, consumers are required to place a proprietary sticker on their phones, which basically serves like a credit card magnetic strip.  This connects to the users bank accounts and replaces the need for a credit card.  None of this is possible though, without banks and merchants agreeing as well.  Banks are required to partner with Bling Nation to set up the infrastructure for this new transaction model, and merchants are required to install special Bling readers – which are basically an upgraded bar-code scanner to work with cell phones.

So who’s actually using this stuff?  Well, Bling Nation went live on May 21 of this year with its first banking customer, The State Bank in Colorado.  Bling says within three weeks of implementation, the bank has activated 25 percent of its customers on the payment network.  Because of the positive consumer reactions, the bank has signed up more accounts in three weeks than it has in the past two years.  

If you didn't already know, using your phone to make payments in place of a credit card is nothing new in Asia.

I'm waiting for some images of the actual sticker and scanner from Bling Nation, for now, the image above is how it looks like somewhere in Korea.

Image Source - Technovelgy