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Fifth Third could put the shine on Bling Nation's mobile payments
A Bling Nation device linked with PayPal

Fifth Third Processing Solutions and Bling Nation announced this week 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.

Mobile payments company Bling Nation’s agreement with Fifth Third will spark Bling’s expansion beyond its current six-state area, says 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 is the nation’s third-largest payments processor based on annual volume.

The BlingTag enables consumers to wave their phones at certain point-of-sale terminals to make a purchase. The mobile phone must have SMS-text messaging capabilities. 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, says Lynn M. Rhoads, senior vice president and communications director for Fifth Third.

Cincinnati-based Fifth Third signed with Bling Nation because Fifth Third clients were looking for new ways to grow their portfolios, Rhoads says.

Many believe the smart phone's ultimate killer app may be payments, allowing consumers to pay at the point-of-sale and see the charge either on their phone carrier's monthly charge, or assign the charge to a credit or debit card. This could be a major competitive threat to kiosks in such areas as self-checkout at retailers. Further, major airlines like United have rolled out mobile phone check-in to join the popular self-check-in at kiosk.

The agreement between Bling and Fifth Third comes on the heels of a test by Bank of America, U.S. Bank and Wells Fargo Bank of mobile payments at contactless payment terminals in New York City.

First Data Corp., the world’s largest payments processor, recently 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.

In addition, this summer the telecom firms AT&T Inc., Verizon Wireless and T-Mobile USA joined with Discover Financial and Barclays plc to pilot a contactless smart phone payment system at stores in Atlanta and three other U.S. cities.

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 to support a mobile payments program in Palo Alto.

Bling 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 says.

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 says.

It is difficult to predict the success of the venture between Bling Nation and Fifth Third Processing, but Rhoads says 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.

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