Recently in Mobile Payments Category

Bling Nation has had its mobile payment system up and running in La Junta, Colorado, for nearly a year. The pilot program began in February 2009, with the system going into public use three months later. As of early March, nearly half of The State Bank of La Junta's checking account customers were using the system to make retail payments at more than 50 local merchants.

Bling Nation provides payment stickers called Bling Tags designed to fit on mobile phones. Participating financial institutions provide the stickers to their customers. To make a purchase, the consumer touches the Bling Tag to a point-of-sale device called a Blinger (see screenshot #1, below). The money is debited from the user's account, and Bling Nation sends a text message confirming the transaction. For larger purchases, the bank has the option to call the user's mobile phone for a PIN to authorize the transaction.

A Brief History of the Program:

• 2007: Bling Nation tests the system in Palo Alto using Facebook employees as customers
• December 2009: Bling Nation enters discussions with State Bank of La Junta
• February 2009: State Bank begins the Bling Tag project, becomes Bling Nation's first paying customer
• May 2009: State Bank begins offering Bling Tags to the public
• September 2009: Bling Nation presents its system at Finovate2009 in New York (video available here)
• March 1, 2010: 500 of The State Bank of La Junta's 1,100 checking account customers are signed up for the system
• March 23, 2010: Bling Nation announces its first east coast client, Adirondack Trust Company, based in Saratoga Springs, New York

Bling Nation focuses on small communities where local banks support a large share of the retail market. In addition to the Colorado trial and the recently announced effort with Adirondack Trust (press release here), the company is looking to expand in similar communities in New England, Boston and Nashville.

Bling Nation authenticates transactions over cell phone networks, connecting the merchant directly to the bank without involving national processing networks. By providing a local payment system, the company can offer lower transaction costs, encouraging retailers to work with local banks. The company also allows merchants to offer savings to customers in the form of loyalty programs, which can be tracked automatically.

#1. Bling Nation's website shows a Bling Tag and a Blinger

 

#2. State Bank prominently features a Bling Nation video on its homepage

Firethorn has updated its mobile banking app to allow consumers to access accounts at more than 3,700 US financial institutions. Previously, Firethorn's mobile banking solution only worked with institutions that were integrated Firethorn providers. Firethorn's provides apps for iPhone, BlackBerry, Windows Mobile, and Java devices.

By creating a mobile interface for existing online banking platforms, Firethorn provides   consumers with mobile services even if their bank doesn't support them. Firethorn's app also  allows users to access account information from multiple institutions through a single mobile interface. (Finovate2009 video here).

Firethorn isn't the only company with this type of mobile offering; Pageonce, Mint and Wesabe all provide similar functionality.

How it Works

1. Users can download the free app using their mobile device or from online at their platform's app store. Firethorn also provides instructions for downloading at mobilebanking.com. (See screenshot #1, below.)

2. After downloading, users launch the app and search for financial institutions. The app provides information on enrolling for mobile service with the various institutions covered. For example, searching for Bank of America leads to an "enroll now" button, along with the information that mobile enrollment is not valid for California, Washington, and Idaho. Choosing USAA requires you to contact the bank to enroll and provides a web address and phone number (screenshot #2).

3. Once enrolled, consumers can log in to check their financial account balances, see their latest transactions, and track if payments have cleared. Financial institutions providing integrated Firethorn services may offer additional services, such as paying bills and transferring funds. Firethorn partners can also offer person-to-person payments from within the mobile banking app, powered by CashEdge's POPMoney technology.

Firethorn is owned by wireless technology company Qualcomm. Firethorn makes its money by providing its partners with a secure mobile banking system. Expanding its network beyond its current list of integrated partners brings the company's app to a wider range of consumers.

#1. Downloading Instructions are Provided for the App

 

#2. Search in the App for the Bank, and Follow the Enrollment Instructions

CashEdge, one of the largest established providers of online funds transfer services to financial institutions in the United States (including Bank of America, Citibank, Boeing Employee's Credit Union, and Wachovia), recently announced that a major new financial institution, FNBO Direct, went live with its new POPMoney service on January 18.

FNBO Direct, a division of First National Bank of Omaha, is the third bank to offer the POPmoney program. The first two banks, First Hawaiian Bank and PNC, launched the service in December 2009. (See our Nebtbanker blog post here.)

The addition of FNBO is a significant coup for CashEdge. First National Bank of Omaha is a subsidiary of First National of Nebraska, the largest privately owned banking company in the United States. First National of Nebraska has more than 6.6 million customers and about $20 billion in managed assets. Signing up a major new bank should nicely expand POPMoney's user base, adding visibility and credibility to the program.

First National Bank of Omaha has incorporated POPMoney into its FNBO Direct line of online banking products. The service is available on the FNBO Direct site under the Online BillPay Account link (see screenshot below).

In order to educate consumers in the new mobile payment technology, FNBO Direct presents a branded website describing the POPMoney process, as shown below. The POPMoney service also provides FNBO Direct with a revenue opportunity, allowing the bank to collect transaction fees from users. (See highlighted section below.)

FNBO Direct charges $2.00 for standard three-day delivery and $10.00 for express next-day transfer service. How bank customers react to these fees will depend on how they want to use the service. While the fees seem reasonable for emergencies or large purchases, they may deter customers from using POPMoney for smaller transactions.