Bling Nation Ltd. this month plans to announce its third proprietary local debit card payment network, this one in partnership with an upstate New York community bank.
The Palo Alto, Calif., company would not identify the bank.
Bling enables consumers to make immediate debit purchases at local merchants that are connected to its closed-loop networks.
In May Bling launched its first closed-loop contactless local debit payment network, with State Bank of La Junta in Colorado.
The program, called Redi Pay Bling, uses the automated clearing house system to link local merchants through a bank's core processing system.
Customers initiate payments using a postage stamp-size "BlingTag" contactless payment sticker, which most attach to their cell phones. Bling sends an SMS text message confirmation of the transaction to customers' cell phones within seconds of authorizing the transaction, including the merchant's name, the transaction amount, an updated debit account balance and notification of any rewards points earned.
Within four months 80% of State Bank's customers had activated a BlingTag, and roughly 62% had used it to conduct a transaction, the bank said.
Merchants can design their own rewards program; the issuing bank also may offer rewards directly to customers.
Merchant fees vary based on contract, but in general Bling debit transactions cost merchants 50% less to accept than signature debit transactions, said Wences Casares, a Bling co-chief executive.
Banks are receiving "two to three times more" merchant-fee revenue per transaction through Bling than through signature debit, he said. He would not be more specific.
Banks pay Bling "a small fee" that Casares would not disclose.
Bling launched a second local network in October with Park State Bank and Trust in Woodland Park, Colo.