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Colorado Town Goes Contactless
For those transactions deemed high-risk, such as purchases over $75, an automated call is made to the customer's phone, requesting a password entry using the phone keypad. If the system cannot contact the customer via phone, the BlingTag Reader will instruct the user to enter his or her PIN on the keypad at the payment location.
The customer then receives a text message on his phone from Bling Nation, indicating the purchase amount, and also listing the remaining balance in his bank account.
Bling Nation charges participating merchants a fee for each transaction, but Casares indicates that it is about half of the cost they pay for debit card transactions, and an even smaller percentage compared with credit card transactions. That fee varies, according to the type and size of the business.
Although the system was initially designed as a low-cost alternative for merchants, Casares says, to the debit and credit card transactions, the other benefits associated with the system have made it desirable as well. "We've learned that this makes a lot of sense to merchants, not just as a cost advantage," he states. For instance, stores also utilize the system to provide customers with loyalty points. In this case, Bling Nation stores customer data, such as the number of purchases that person makes at a business, and issues a reward when the patron's purchases reach a predetermined quantity—for example, the customer might earn a free cup of coffee after making five purchases at a coffee house.
The system has been popular among bank customers, Casares says, noting that someone in town recently commented to him, "I've even got my grandmother Blinging." The convenience of the NFC technology, he indicates, makes a transaction possible in approximately five seconds. "After they've used it for awhile, they say a traditional credit or debit card feels counterintuitive."
The Bling system works best in small communities, Casares says. The company chose La Junta to launch the system, he notes, since it has only about 8,000 residents, most of whom make purchases in the immediate area. The firm now plans to expand to communities with a population of 30,000 to 100,000, and hopes to sign up another 10 banks by the end of 2009. Within two years, he adds, Bling hopes to begin exploring suburban areas to deploy the system. The company is also in discussions with several universities to pilot the technology for students using Bling Nation's services on their student ID cards.
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The customer then receives a text message on his phone from Bling Nation, indicating the purchase amount, and also listing the remaining balance in his bank account.
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| Wences Casares, co-CEO of Bling Nation |
Although the system was initially designed as a low-cost alternative for merchants, Casares says, to the debit and credit card transactions, the other benefits associated with the system have made it desirable as well. "We've learned that this makes a lot of sense to merchants, not just as a cost advantage," he states. For instance, stores also utilize the system to provide customers with loyalty points. In this case, Bling Nation stores customer data, such as the number of purchases that person makes at a business, and issues a reward when the patron's purchases reach a predetermined quantity—for example, the customer might earn a free cup of coffee after making five purchases at a coffee house.
The system has been popular among bank customers, Casares says, noting that someone in town recently commented to him, "I've even got my grandmother Blinging." The convenience of the NFC technology, he indicates, makes a transaction possible in approximately five seconds. "After they've used it for awhile, they say a traditional credit or debit card feels counterintuitive."
The Bling system works best in small communities, Casares says. The company chose La Junta to launch the system, he notes, since it has only about 8,000 residents, most of whom make purchases in the immediate area. The firm now plans to expand to communities with a population of 30,000 to 100,000, and hopes to sign up another 10 banks by the end of 2009. Within two years, he adds, Bling hopes to begin exploring suburban areas to deploy the system. The company is also in discussions with several universities to pilot the technology for students using Bling Nation's services on their student ID cards.
