Bling Nation, the upstart mobile payment firm created to challenge the major credit card companies' hold on the payments industry's near field communication (NFC) market, suspended service in May 2011 pending a retooling of the company. Most of the sales team has reportedly left the company.
Bling Nation was started in 2008 by two Brazilians, Wences Casares and Meyer Malka, who founded Patagon, the largest online brokerage in Latin America. The company developed an integrated acquiring and processing platform for local and regional banks.
Bling Nation's objective was to get customers to allow payment stickers - in reality, NFC form factors - on the back of their cell phones to make contactless payments. After payment, a customer receives a phone message confirming the transaction and giving the new account balance. Bling Nation receives a percentage of processing costs and claims it saves merchants up to 50 percent in processing fees. Bling Nation payments can be processed by PayPal Inc. and through banks.
Bling Nation's sticker, dubbed "Bling tag," also allows consumers to carry out several functions on the Facebook and Foursquare social networking sites. Merchants can connect with customers through Facebook and Foursquare using Bling Nation technology.
Bling Nation will neither confirm nor deny reports that it is reassessing its business. It talks about what it is doing in vague and general terms. When asked by The Green Sheet for clarification of its status, the company issued the following statement:
"Bling Nation has completed its initial deployment phase of its FanConnect and PayConnect products and is working hard to take all of the great learning and insights on the economics of the mobile, local and social areas that we've received from our merchants, consumers, banks and partners to build out the next generation of Bling Nation. The Bling Nation leadership team remains excited about this space and feels they have a winning combination that will dominate these areas in the long term."
PayConnect is the Bling Nation term for its NFC sticker technology. FanConnect is email based marketing software that allows merchants to create, send and track email advertising campaigns. Bling Nation reportedly encountered trouble after it introduced FanConnect in February 2011. Problems with the program reportedly arose when the company tried to force its merchants to accept the FanConnect service. Merchants balked.
Bling Nation ultimately generated some excitement from bankers but didn't win much acceptance from merchants or consumers. Industry watchers reported Bling Nation raised more than $33 million from investors prior to its suspension of activities, so the company is not likely to disappear, but some analysts believe the company may be rebranded.
To get an industry perspective on Bling Nation's status The Green Sheet asked Mocapay Inc. President Doug Dwyre to comment. Mocapay markets a mobile payment platform that allows merchants to offer loyalty and gift card programs. Mocapay founder, Rod Stambaugh, serves on Bling Nation's board.
Looking at the FanConnect marketing strategy that many speculate caused Bling Nation's recent difficulties, Dwyre said, "I'm a big believer when it comes to those kinds of platforms that all constituents need to be included - the merchants, the consumers and the issuers. If you don't take these constituents into consideration, you will fall short somewhere. If you don't give anyone any reason to use [your product] you are going to fail."
Dwyre said he suspects Bling Nation, with $33 million in venture capital available, is ripe for a restart. "From the outside looking in that's what I'd do," he said. "I'd look at new technology. They have tried the sticker-based technology with a stand-beside point-of-sale versus integrated solution."
When asked how it is possible for a new company to compete against the major card brands or PayPal,
Dwyre noted that the hurdle for entering the market as a card company is getting merchants and consumers to adapt. "PayPal, for instance, worked because it was well aligned because of the early partnership with eBay as an exchange network between buyer and seller," he said, adding that unless Bling Nation finds the right partnership, it's hard to see how the company will continue its old business model.
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