In a bid to become the mobile payment platform of choice, Bling Nation has launched a social media element to its contactless Bling Tag offering. Introduced in October 2010, FanConnect is a rewards and loyalty application that intertwines contactless payments, social marketing and the ubiquitous Facebook page.
A Bling Tag is a contactless chip that affixes to a user’s mobile device to enable payments at the point of sale. When a purchase is made at a Bling-enabled merchant, the phone is tapped against a reader to initiate the transaction. User’s wishing to go beyond the payment experience can register their tag with Facebook. Each Bling tap is then emblazoned on their Facebook page for all their friends to see–something that can help a merchant market to loyal customers and their friends.
With a Bling account, a user can make mobile payments, earn rewards, participate in loyalty programs and add a social media aspect to their purchasing behavior. Both customers and merchants can track purchases through a dashboard embedded in Facebook. Merchants can also send customers special offers and rewards via SMS or Facebook. “We’re using Facebook because (users) have an inbox and a treasure chest where offers exist,” says Matt Murphy, Bling Nation’s general manager for the Pacific region. “(Merchants) can create meaningful offers that give you a real discount.”
“We’re really trying to bridge this connection at the point of sale and use buzz and awareness to determine ROI. Businesses can advertise, but it’s hard to tie that into a return. With the redemption aspect, our platform is able to give them this,” says Murphy.
No consumer information is stored directly on the tag. “Each product creates dynamic code for the transaction and authentication,” Murphy says. “All information is stored in the cloud. No consumer information travels on our rails.”
Bling Nation partnered with Merchant 360 to provide the hardware and support for their platform. The Bling Tag is an IC microchip with an antenna attached. Merchants use a Verifone POS terminal application written for the Verix Vx operating system. “We write an application for their platform that can be used for any Vx device,” says Steve McRae, CEO of Merchant 360. Merchant 360 also acts as the support and technical provider for Bling’s customer service needs.
Consumers have the option to use the tag just for the FanConnect service or they can link their Bling Tag to a financial account to pay for goods at merchants offering the PayConnect service. When a user links a financial account, a PIN is selected to secure transactions. In addition, says Murphy, the system is intelligence-based and uses algorithms to determine abnormal spending behavior.
Currently the service is available in Colorado, Texas, Tennessee, New York, Massachusetts, and California. Bling Nation has partnered with PayPal and several small banks to provide mobile payment services. Fifth Third Processing Services offers it as a turnkey solution to its processing customers.
Merchants subscribe to the Bling Tag service for a 12-month period, which includes a two-month free trial. For $199, they purchase the BlingBox, which includes a Verifone Verix Vx reader, Bling tags and marketing materials. For an additional $49 per month, the FanConnect service can be added. PayConnect, which includes all of the FanConnect social media features, is an additional $10 per month.
The company hopes FanConnect will propel its mobile payments service. “I’ve worked with lots of companies that have come and gone (and) I have to say that the strategy here is a little different. There’s a lead on distribution and uptake … Bling has built a good brand people recognize,” says McRae.
Partnering with PayPal dramatically increased its footprint and helped propel the product’s usefulness. “It’s a low friction way of getting a payment to happen,” says George Peabody, director of Mercator Advisory Group’s Emerging Technologies Advisory Service. “Now that they’ve got PayPal involved, it makes the merchant acquiring easier.”
Peabody sees the FanConnect service as a way to accelerate awareness. “The beauty of it is it’s really merchant-specific. You can tie it to your Facebook page. (The merchant) can control the message and [consumers] accrue points and use them at the point of transaction,” says Peabody, “not later or by looking at a catalog. Debit rewards are going away. Merchants want to issue the benefits directly instead of another merchant doing the fulfillment.”
Although FanConnect can work with a variety of social media sites, Bling Nation chose to integrate itself with Facebook, going as far as to embed its company website into Facebook. “Having our whole web presence in Facebook helps merchants and consumers where the conversation occurs. They can link to real-life purchases and bridge that gap between online and offline,” says Murphy.
Merchants have seen mixed results with the Bling Tag.
John Paul Coupa of Coupa Café has the system in all three of his northern California locations. “It gets used a lot,” says Coupa, “(even) more than American Express.” Coupa recently implemented the FanConnect system.
Other merchants have not enjoyed the same level of success. Charles Savas, president of Center Beverage in Stoneham, Mass., got rid of the system after just three months. “They were going to charge me $40 a month,” he says, “and I only had $35 in sales for the first three months.”
Red Door Movies in Palo Alto, Calif., also stopped using the service. “Our store only has one or two customers using it,” says Sonny Park, manager.
Murphy admits that businesses with more frequent users are likely to see more benefits from the system. However, he adds businesses from yoga studios to hotels have made the system work.
With FanConnect, consumers can choose to gift their special deals to Facebook friends, and Bling Nation plans to introduce more features to expand its loyalty and payment features. “We will integrate more reasons for customers to tap their Bling Tag,” says Murphy.
As handsets with embedded NFC come to the market, Bling Nation sees itself positioned ‘inside’ of the phone as well. “We don’t want to be a competing tag,” says Murphy. “We want to be the platform businesses use to connect … the ‘Intel inside’ to the NFC world.”