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With Payment Stickers, Tennessee Bank's in the Pink

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First Federal Savings Bank is doing something different from other banks that issue contactless payment stickers. It's doing something pink.

Only a handful of banks offer these stickers, and most use them to display their own logos. But while this strategy makes branding sense, it doesn't make much fashion sense, according to the Clarksville, Tenn., community bank. And since the stickers are often placed on the back of users' mobile phones, looking good is important.

Placing a sticker on the phone "makes a fashion statement," said Earl Bradley, First Federal's chief executive. "I think it's best that banks don't put their logo on it … if it was just an ugly tag, I think that would have an influence" on whether people actually use it to make purchases — and not a good influence, Bradley said.

This is why First Federal's stickers come in 15 colors and patterns, including blue, orange and even pink camouflage.

First Federal, a $345 million-asset unit of First Advantage Bancorp, is testing payment stickers from Bling Nation Ltd., which operates a community-based payments system. It teams up with small banks, which issue the stickers, and local merchants, which accept them for debit transactions that pull money from users' accounts at the issuer. Bling and its partner banks encourage people to put the stickers on their mobile phones, and users receive receipts for each transaction via text message.

Bling's other bank partners have put their logos on the payment stickers, but in February, the Palo Alto, Calif., payment company began offering banks their choice of 24 colors and designs.

Bradley said the importance of this change was — at first — not obvious.

"I'm almost thinking this is ridiculous — what a nightmare," Bradley said, but he quickly realized that in laughing off Bling's rainbow of choices, he "was about to miss out on a very critical factor: what does the consumer want?"

In this case, the consumer wanted pink.

"The pink one, the ladies in the bank were just kind of squealing over this," he said.

Men preferred the sand-themed camouflage, which holds particular appeal to soldiers, Bradley said; Fort Campbell, home to the U.S. Army's 101st Airborne Division, is just outside Clarksville.

A bank director who managed to get the last available camo sticker "was just proudly showing this thing off" as soon as he got it, Bradley said.

Bradley chose orange, to support the University of Tennessee, but his more fashion-minded peers later teased him that it was not the right shade of orange. "I took an orangeish red one, and I've been teased about it because it's closer to the Gator orange," for the University of Florida, "than it is University of Tennessee orange," he said. Bradley has also been told that it clashes with one of his ties, a bright orange one.

Despite his skepticism, Bradley said, he has realized that offering several options to customers could make it more fun for people to pull out their phones to make payments.

"The fact that they are colorful, that you're able to provide contrast … I think it does make a difference," he said. "It's very influential, overall, to a certain segment of the population … some people are going to be very fashion-conscious."

Though the stickers do not have bank logos, they have the word "Bling" written on them. Bradley said it is important to use Bling's brand — and not the bank's brand — to promote the payment system. "With Bling taking off nationwide, it needs to be like Visa and MasterCard," he said.

A dozen banks now offer Bling, including Valley National Bank of Lamar, Colo., which the payments company announced as its newest partner Wednesday.

Judy Balint, Bling's chief marketing officer, said her company is working on more customization options.

Next up: leopard print.

"It reinforces the perception that this is a fun product," she said. Bling is also preparing to offer "skins" that cover the entire back of a user's phone. The larger area allows for even more customization options, such as a Bling skin with pictures of someone's family.

"Phones, very much, are an extension of a person's personality," Balint said. All new Bling banks have access to Bling's new designs, and earlier Bling issuers will have access to the new designs as they order more stickers, she said.

Aaron McPherson, a research manager for payments at the Framingham, Mass., research firm IDC Financial Insights, said Bling's strategy "taps into the same kind of thing as iPhone cases, where you've got graphic designers who design custom cases."

The market for such customization is huge, he said, particularly "for people who want to 'bling out' their phones — no pun intended."

Though many banks expect contactless payment capabilities to be built into phones' hardware someday, eliminating the need for stickers, McPherson said that day is far enough away to allow sticker designs to mature in the same way the designs of checks and credit cards have, such as by adding licensed characters such as Popeye, Hello Kitty or Mickey Mouse.

"The more ways you give people to customize these things, the more popular they'll be," he said.

Even Bling's early efforts at customization "probably will accelerate adoption" of its payment system, McPherson said. "It makes it cooler and I can see it helping growth."

Bling is not the only financial services company pushing contactless payment stickers, of course. Citigroup said this week that it is now issuing them, and Discover Financial Services does, as well. A Discover spokeswoman wrote in an e-mail that the program is still in the early stages, and she could not comment because Discover would not "be able to add much color" to this story.

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