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NFC pioneer packs in proximity payments

Bling Nation failed in bring in the bling

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Having failed to find a business model that worked, the pioneering proximity payment company Bling Nation has stopped processing payments – although it claims the move is temporary while it finds a workable business model.

The pay-by-sticker system was launched in 2009, striking deals with community banks and under cutting credit card processing fees, but despite its involvement in trials by Facebook and PayPal, American Banker tells us that the company just couldn't make enough money and has suspended services while it thinks over its business model.

Bling Nation was interesting in that it eschewed the overwhelming security normally applied to new payment systems, focusing instead on simplicity and usability. A Bling tag is just a sticker, often applied to the back of a cellphone, which responds with a serial number when queried by a custom reader that Bling nation supplied to traders who signed up to the scheme.

The number isn't encrypted, and as the Bling tag is RFID (rather than the cryptographically-secured NFC standard) it is vulnerable to interception and various forms of attack. But Bling reckoned the small-value transactions possible on the pre-paid tag made such an attack unlikely, and sure enough it's not lack of security which has downed Bling.

"We found it was easier to kind of pause and fix [our business model] than try to tweak and fix," the company told American Banker, declining to explain what kind of fix might work.

The company's last attempt to bump revenue, by introducing a Facebook-connected loyalty scheme called FanConnect, fell flat when the merchants declined to get involved: "They wanted to start charging for a loyalty type programme" one of those merchants told American Banker, continuing: "I didn't need to pay them ... for that because I already had my own loyalty program."

FanConnect was later made optional, but the reluctance of merchants to pay someone else to run their loyalty scheme is bad news for some other players who have aspirations in the same space. ®

Top three mobile application threats

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