Not Enough Bling: Did Durbin Amendment Cause Bling Nation to Shut Down Mobile Payment Service

Bling Nation's strategy was to win merchant acceptance by charging lower fees than traditional debit and credit networks.   They raised "Big Bling"  (+$30 million)  With the passing of the Durbin Amendment, debit swipe fees were reduced by over 70% and are now capped at .12 cents.  Translation:  Bling Nation's biz strategy went to hell in a hand-basket.   .12 cents does not leave enough Bling and very well may have been the major contributing factor to shutting down their operations while they figure out what to do next.

Funding is not an issue for Bling Nation, which has raised more than $33 million in capital from backers including Lightspeed Venture Partners and Balderton Capital.  A Bling spokesman would not discuss details about what its next service might look like or when it would be released but said Bling Nation recognizes the need to deliver something beyond just another way to make or accept payments.  "We've learned that mobile, social and local really need to come together with NFC to make that transformation."

Bling Nation has shut down its mobile payment and loyalty services while it overhauls its business model, a measure the startup insists is only temporary.  Bling Nation said it will roll out a revamped product later this year: "We found it was easier to kind of pause and fix [the service] than to try to tweak and market," said Bling Nation general manager Matthew Murphy in an interview with American Banker. Murphy declined to divulge specifics on the firm's plans.

Read more: M-payment network Bling Nation halts service to retool business model - FierceMobileContent http://www.fiercemobilecontent.com/story/m-payment-network-bling-nation-halts-service-retool-business-model/2011-06-13#ixzz1PAOOip4s 


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