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Residents living in the La Junta area of Colorado in the United States call their daily payments “Blinging”, a term derived from California’s new payment network company Bling Nation, Union State Bank and Viaero Wireless (mobile phones in remote communities in Colorado and Nebraska) Service provider), a set of contactless payment applications provided by consumers. Consumers paste RFID tags on their mobile phones and make purchases in more than 60 local stores. The payment amount is directly deducted from the user’s bank account, and a receipt and text form are sent The real-time account balance is sent to the user’s mobile phone, and the whole process only takes a few seconds.
The system was officially launched in July 2009. At present, 35% of La Junta customers of the Bank of Colorado use Bling or state bank stickers. The sticker contains a 13.56 MHz RFID passive tag that complies with the NFC standard. 90% of local retailers have Bling payment equipment is installed at the cash register. Three other communities in California and Colorado will soon adopt Blinging. Merchants in two of these communities have also installed POS devices.
The reader reads the BlingTag sticker on the phone
Wences Casares and Meyer Malka are the founders of Bling Nation. The two previously established a Brazilian company, Banco Lemon, which was later acquired by Banco do Brasil. Banco Lemon provides bank accounts to low-income users who do not have a bank account. The bank accepts cash deposits from these users and provides a receipt with a barcode printed on it. Users can scan barcode receipts at participating stores for cash withdrawals or shopping payments. This strip system is very popular in Brazil. Casares explained that he and Malka decided to set up a company in the United States to provide a non-contact solution that not only facilitates shopping for customers, but also allows merchants to enjoy low transaction costs.
According to Casares, traditional debit or credit card transactions require merchants to pay certain transaction fees. This is largely due to the fact that each transaction involves multiple parties, including banks, global financial service providers such as MasterCard and Visa, and many others. A communication service provider that moves data between databases.
However, Casares stated that most non-cash payments are only a few miles away from the issuing bank, especially in small towns. Therefore, Bling began to seek low-cost, more direct payment methods for local banks than debit cards and credit cards, thereby reducing transaction costs for merchants. In cooperation with Viaero Wireless, the company can send and receive information between the bank and the server through the cellular connection, and send the receipt to the user’s mobile phone; while the NFC technology greatly speeds up the payment process, users do not need to take out the wallet, search for cash, sign or enter a password.
This summer, customers received BlingTag in their mailbox, a 25-cent coin-sized NFC sticker with the state bank and Bling Nation logos printed on the front, as well as bank statements and instructions for activating the tag on the bank’s website. The user then pastes the label on the phone. Each label contains a unique ID code. Once the user completes the label activation, the label corresponds to the user’s bank account number.
When shopping, the user brings the phone close to the BlingTag NFC reader in the store, which reads the ID code of the tag. A Viaero Wireless SIM card in the BlingTag reader sends an ID code to the bank through the cellular network; the bank confirms the balance to ensure that the user account has enough money to pay for the transaction, and then deducts the payment amount from the account, and then sends a confirmation signal to Bling to read Device. At the same time, the reader rewrites a randomly generated ID code for BlingTag and deletes the old ID code, thereby improving security, in case someone obtains the ID code stored in the tag and tries to reuse it.
When transactions that are considered high-risk occur, such as the transaction amount exceeding $75, the user’s mobile phone will receive an automatic call requesting a password. If the system cannot contact the user through the mobile phone, the BlingTag reader will instruct the user to enter the PIN code.
Then, the user’s mobile phone receives a text message from Bling Nation, listing the payment amount and account balance.
Bling Nation charges merchants a certain fee based on each transaction, but Casares claims that this is only half the cost of a debit card transaction, which is smaller than a credit card payment. The transaction type and the amount of money are different, and the fees are also different.
Although the initial design purpose of this system was to provide merchants with a way that is lower than the transaction cost of borrowing and credit card transactions, Casares said, the system itself also has other advantages. For example, the store also uses the system to calculate customer points. Bling Nation stores user information, such as the number of user purchases, and when a preset amount is reached, a certain reward is given: for example, users who accumulate and consume 5 cups of coffee can get a free cup of coffee.
This system has proven to be very popular among bank users, and the convenience of NFC technology allows users to complete transactions within 5 seconds.
The best place to apply the Bling system is in small communities, Casares said. The company chose La Junta as the project application location because there are only 8,000 residents, most of whom shop in nearby stores. The company now plans to extend the system to communities with a total population of 30,000-100,000, and hopes to sign cooperation with 10 other banks by the end of 2009. The company has also contacted several universities and plans to use the technology on student ID cards.
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