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Fifth Third expects to put more shine on Bling Nation's mobile payments

October 7, 2010

Mobile payments company Bling Nation’s agreement with Fifth Third Processing Solutions will spark Bling’s expansion beyond its current six-state area, said Wences Casares, founder and co-CEO of Bling Nation.

"This partnership will allow us to reach a large number of financial institutions and help us expand our service to more customers and merchants in more areas," Casares said. Bling Nation currently offers its service in California, Massachusetts, Colorado, Texas, New York and Tennessee.

Fifth Third and Bling Nation announced Monday they had signed an agreement in which Fifth Third will promote to its more than 3,000 bank clients Bling Nation’s mobile-payments service. Cell phone owners attach a BlingTag, which is a quarter-sized microchip, to the back of their cell phones. The mobile phone must have SMS-text messaging capabilities.

The BlingTag enables consumers to swipe their phones at certain point-of-sale terminals to make a purchase. Banks interested in the service sign a separate agreement with Bling Nation, which is based in Palo Alto, Calif. The financial institutions, however, must route their Bling Nation transactions over Fifth Third’s processing network, said Lynn M. Rhoads, senior vice president and communications director for Fifth Third.

The agreement between Bling Nation and Fifth Third adds to the growing rush toward mobile payments, following years of discussions. Bank of America, U.S. Bank and Wells Fargo Bank are currently testing mobile payments at contactless payment terminals in New York City.

First Data Corp., the world’s largest payments processor, has signed an agreement with SK C&C USA, an American subsidiary of a Korean company, to offer mobile payments beginning in the first quarter of 2011.

Fifth Third, which is based in Cincinnati, signed an agreement with Bling Nation because Fifth Third clients were looking for new ways to grow their portfolios, Rhoads said. Fifth Third is the nation’s third-largest payments processor based on annual volume.

Bling Nation’s contract with Fifth Third is Bling’s second major agreement in less than two months. In September, San Jose, Calif.-based payment terminal manufacturer Verifone Systems Inc. signed an agreement with Bling Nation to support a mobile payments program in Palo Alto.

Bling Nation employees distributed VeriFone’s VX 810 DUET and the wireless VX 680 to merchants. The payment terminals enable merchants to accept Bling payments.

Mobile phone users must link the BlingTag to a PayPal account or to a direct debit account. Bling, however, must be partners with the debit-card issuing bank, Casares said.

Once banks join Bling, the financial institutions can offer the service to their merchant customers. Merchants need a BlingBox starter kit, which includes a “Blinger” terminal that accepts Bling Nation payments at the point of sale. The kit also includes BlingTags and marketing materials, Casares said.

It is difficult to predict the success of the venture between Bling Nation and Fifth Third Processing, but Rhoads said it fits into young persons’ ideas of what is “cool.”

“It’s a cool idea, and it will be popular with kids who carry their cell phones everywhere,” she said.