Come on mobile payments! $8 million dollars invested in Bling Nation

Bling Nation announced 8 million dollars in Series A funding today. The NFC-based mobile payment company allows consumers to make payments at checkouts by tapping their device against a special reader. This is a big boost for mobile payments in general, as it shows how rapidly faith is growing in the market.

How does it work?

So you want to buy a litre of milk. You tap your phone against the reader at the checkout, and you immediately receive an SMS. That text contains confirmation of the purchase, info about your new bank balance and (here’s a clever bit) info about any loyalty rewards you might have earned. Loyalty rewards that you can now immediately redeem.

Bling Nation has a good focus for a mobile payments company - it aims at working locally. Bling Nation targest local and community financial institutions like Credit Unions. The idea is that you don’t need an international bank and credit card processing facilities to pay for something at your local corner store. It works out cheaper for the corner store as well, because they won’t need to pay credit card transaction fees.

Bling Nation claims that its first bank client, The State Bank in Colarado, has seen great results from their service. The service kicked off in May. Within three weeks, Bling claims the bank saw 25% of its customers start using the service. Apparently the bank also opened more merchant accounts during those three weeks than in the previous two years.

From the release:

“Just about every consumer is already carrying a small computer, in the form of their mobile phone, with them all the time,” said Wences Casares, co-CEO of Bling Nation. “This small computer has immense storage capacity, processing power and connectivity, so why should customers carry anything else to make a payment? Why should merchants accept more expense?”

“Bling Nation is enabling innovative mobile payments solutions that are much more convenient and significantly safer than paying with a credit card or cash,” said Eric O’Brien, managing director at Lightspeed Venture Partners. “Today, the payments industry is an inefficient $60 billion industry that closely resembles the telecom industry a decade ago - what is being charged for a payment bears no relationship with the actual cost of processing that payment. This tremendous market opportunity, coupled with a management team unparalleled in track record and industry experience, makes Bling Nation one of the most exciting new investments in Lightspeed’s portfolio.”

What we think?

I really like the Bling Nation service, but I’m a fan of mobile payments in general. And if the number of stories about that market we’ve been seeing lately is any indication, I’m not alone. Apart from anything else, there’s a huge variety of service options for people who want to use mobile payments. There’s NFC, like Bling Nation. There are also mobile barcode options, SMS, mobile apps, mobile internet sites. All the main channels for mobile media have some decent payment options. Consumers are actually pretty spoilt for choice - there’s a huge focus on quality, ease-of-use and security for m-payments.

Actually, it would be well worth looking at the best or most exciting services around and doing a comparison. Hmmmm… I smell a Top 5 article coming on.