If US start-up payments processor Bling Nation has its way,
large payment service providers and card issuers are facing the
prospect of falling revenues in the US local community bank and
credit union market.
Spearheading Bling’s drive into this market is a solution which
supports payments between small financial institutions’ local
demand deposit account (DDA) customers and their merchant customers
by bypassing the conventional debit payment model and replacing it
with local closed loop payment network.
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“We believe that community banks and credit unions should own
any local debit transactions between their own DDA customers and
their merchant customers – rather than a large payment provider or
card issuer – and our technology has been carefully designed to
make that a reality for them,” said Bling joint-CEO Meyer
Malka.
A key feature of Bling’s solution is contactless payments
technology incorporated into mobile phones and merchant POS. When a
customer undertakes a contactless payment at a merchant’s suitably
equipped POS a short message text is sent automatically to heir
mobile phone confirming the transaction and reporting the remaining
balance on the DDA.
Bling believes its solution provides “significant cost savings”
on fees associated with the traditional method of processing a
debit transaction.
“As the economy continues to tighten, local bankers are looking
for opportunities to increase non-interest income and merchants
will attempt to reduce operating expenses without sacrificing
levels of customer service,” said Bling joint-CEO Wences
Casares.
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By GlobalData“The existing methodology for processing debit card transactions
was designed with the largest of banks’ interests in mind, not
those of smaller community financial institutions.”
Founded by Malka and Casares, Bling’s technology has been in
development for the past three years. Bling’s advisory board
includes John Reed, former chairman of Citibank and former chairman
of the New York Stock Exchange; and Jeff Stiefler, former chairman
of specialist credit union and small-bank technology developer
Digital Insight and former president of American Express.
