California-based tap-and-pay mobile payments startup Bling Nation has certainly had a busy 2010. Not only has it expanded its services in communities throughout the US via a series of partnerships with local financial services providers, but it has also landed a significant deal with PayPal to link its contactless BlingTags to PayPal accounts; this would allow consumers to carry out contactless payments at Bling Nation-powered merchants and have the funds deducted from their PayPal accounts. The integration is currently beta tested by over 2,000 PayPal employees at the company's San Jose headquarters.
In the wake of this significant win, The Paypers sat down with Meyer Malka, founder, co-chief executive officer and director of Bling Nation to discuss Bling Nation’s value proposition, current development and vision on what’s next for the mobile tap-and-go payments market.
The Paypers: First of all, I would like to ask you to please provide our readers with a brief insight into the vision behind Bling Nation. Why a tap-and-pay mobile payment network?
Meyer Malka: Tap-and-pay is a quick and easy way for any consumer to make a secure mobile payment. It's easy and it's safe. They don’t need to download an application and they don’t need to have a special kind of phone. They only need a BlingTag, a microchip sticker that is encrypted and only linked to a customer’s phone number that adheres to any mobile phone. They can start paying for purchases with their mobile phone and even redeem incentives instantly at the point of sale.
The Paypers: In brief, what is your company’s main value proposition and how is it delivered for individuals and for business customers?
Meyer Malka: Our main value proposition is that we connect financial institutions, businesses and consumers to a new way to pay at the point of sale. Once businesses sign up with Bling Nation through their local financial institution, they only need to plug in a Blinger, the point of sale terminal. The service is often a big differentiator for businesses enabling them to provide their customers with a new option to pay using their cell phones to tap-and-pay for purchases. In addition, businesses pay less in transaction fees and are able to streamline payment processing with the Bling Nation service. Finally, they have the ability to create and easily manage loyalty programs.
Consumers stick the BlingTag to the back of their phone, and then tap to pay for purchases. Their BlingTags are linked to their bank direct deposit accounts, and is secure since there is no information stored in the tag. Bling Nation is not only faster, but more secure than using cash, check or plastic. Consumers can also redeem points or other loyalty incentives instantly at the point of sale. There is no more having to carry a separate loyalty card or coupons with you.
The Paypers: What type of charges can merchants expect and how are they levied?
Meyer Malka: Accepting tap-and-pay mobile payment will not cost businesses extra. Bling Nation can cost a fraction of global processors and have no hidden fees. In fact, it can save them money on interchange fees, while enabling them to offer flexible loyalty programs. Transaction fees can be 50 percent less than current interchange fees.
The Paypers: Your services target both individual consumers and businesses – quite a challenge, and one that makes it hard to avoid a “which came first, the chicken or the egg”-type conundrum. In order to boost consumer use and confidence in tap-and-pay services, merchants need to deploy the proper infrastructure; however, it is difficult to persuade merchants to invest in infrastructure in the absence of a sufficiently large number of users to justify the expense. In other words, in order to achieve critical mass for your products and services, which side of the equation do you think needs to be developed first – the consumer or the merchant one?
Meyer Malka: They are both equally important components in the equation. Consumers want to be able to use tap-and-pay mobile payment at their favourite merchants and merchants want a built in audience that will want their services and products. It is the old “chicken and the egg” dilemma, so we are working with all the different parties to create a compelling service for all.
We’re seeing a lot of interest from financial institutions, merchants and consumers. Since we first launched our service in May 2009, Bling Nation has since partnered with more than a dozen financial institutions and deployed in communities such as Palo Alto, Calif., Saratoga Springs, N.Y. and several cities in Colorado. It’s very exciting!
The Paypers: What are some of your company’s strongest selling points for the business (merchant) market segment?
Meyer Malka: We believe there are several benefits for merchants:
The Paypers: How long does it take for a merchant to become fully integrated with your payments processing environment?
Meyer Malka: It’s fairly quick and easy for the merchant. First, they need to sign up with a financial institution that offers our service. Merchants are given “Blingers”, point of sale terminals, to scan the tags. There's hardly any set up required, they just need to plug the terminal into a power source.
The Paypers: Where does loyalty come into the equation? Were loyalty programs one of the main arguments in favour of your company choosing to go going the contactless m-payments route?
Meyer Malka: Having the ability to set up loyalty programs is important to merchants. They want customers to keep coming, and having incentives are valuable and enticing to customers. The Bling Nation service was set up to provide those types of options easily to merchants.
The Paypers: Where are you now in terms of market coverage?
Meyer Malka: Bling Nation has agreements more than a dozen banks, and we’ve announced deployments in communities in Colorado, Massachusetts, New York, Tennessee and Texas. We’ve also just announced a partnership with PayPal. We are using PayPal’s open APIs to allow early adopters and PayPal employees to link their Bling tag to a PayPal account and fund purchases that way. An introductory program is underway in Palo Alto, California.
The Paypers: What are some of the main obstacles you have encountered so far? What are the top three concerns raised by merchants and individuals when it comes to making tap-and-go payments?
Meyer Malka: The main obstacle for all “new” technologies is awareness, so we need to scale quickly and help broaden our education. The top concerns are security and ease of use, which we believe we have addressed with our offering.
The Paypers: Where is Bling nation now? What are you currently working on, and what is your customers’ reaction to your services?
Meyer Malka: As above, Bling Nation has agreements with more than a dozen banks, and we have announced deployments in communities in California, Colorado, Massachusetts, New York, Tennessee and Texas. We think that customers are surprised at how easy and secure the service is.