Bling Nation Ltd. is ramping up its sales efforts through a partnership with Fifth Third Processing Solutions LLC.
The Palo Alto, Calif., company has been marketing its contactless debit system to community banks, one town at a time. Under the partnership deal announced Monday, Fifth Third will offer the Bling system to banks nationwide.
"I think that right now, with this, we should be able to grow in triple digits every other week," Meyer Malka, Bling's co-chief executive, said in an interview Tuesday. "We're growing, and doing our part to make this a real business."
About 15 banks operating in five states have begun offering Bling in local markets since the company's inception in 2008, and Malka said Bling is signing up about 1,000 new users "every few days."
Analysts said that Fifth Third, which has a history of working with alternative payments providers, is a good fit for Bling.
"I think it's a good move," said Adil Moussa, an analyst for Aite Group in Boston. "With someone like Bling Nation, it's really a complementary type of service, so instead of seeing them as a competitor. They really reached out to them, and worked with Bling Nation, as an ally."
Fifth Third Processing Solutions, a unit of Fifth Third Bancorp of Cincinnati, also supported the payments startup Revolution Money before it was bought by American Express Co. earlier this year. And Moussa said Fifth Third was one of the first processors to support PayPal Inc.'s payment system.
If Bling Nation's system becomes more widespread and other processors want to support it, Fifth Third could end up being six months to a year ahead of its competitors — with a better deal. Moussa said Fifth Third will likely receive a transaction fee on purchases made with the Bling system.
Community banks that use the Bling system offer contactless payment stickers, BlingTags, to customers, who link them to their bank accounts. They use the stickers to make purchases at participating merchants. The funds are drawn from users' accounts across the automated clearing house network. BlingTags can also be linked to PayPal accounts.
Bling sends text message confirmations to customers' cellphones after authorizing the transactions.
While merchants pay 1.5% of the sale for Bling transactions, about half what they must pay to accept credit cards, there are no intermediaries. That means banks retain a larger share of the fee than they do with traditional network debit programs.
Fifth Third will offer merchants an acceptance kit, called a BlingBox, to help them get ready to accept Bling payments.
William McCracken, chief executive of Synergistics Research Corp. in Atlanta, said the pending overhaul of debit interchange regulations could be an opportunity for Bling.
"With the thought of payment interchange being reduced, bank card issuers have to look at all types of payment products," McCracken said. "Mobile payment is one of those growing areas," he said.
Banks, he said, "can't be left behind."
Bling has been getting more inquiries from smaller banks that are looking for new sources of revenue, Malka said.
But the company has a lot of catching up to do.
"Bling, to some degree, is well known, but it still has a small market share," McCracken said. "They're feeding to their customer base. They are saying, 'We're the most innovative.' "
