US mobile payments outfit Bling Nation has secured $8 million in Series A funding, with $6.3 million coming from lead investor Lightspeed Venture Partners and the remaining $1.7 million raised primarily from Meck.
Founded in 2007, the company enables consumers to pay merchants with the tap of a mobile phone instead of using a credit card or cash.
Eric O'Brien, managing director at Lightspeed Venture Partners explains the rationale for the investment: "Today, the payments industry is an inefficient $60 billion industry that closely resembles the telecom industry a decade ago - what is being charged for a payment bears no relationship with the actual cost of processing that payment. This tremendous market opportunity...makes Bling Nation one of the most exciting new investments in Lightspeed's portfolio."
After tapping the phone at the merchant point-of-sale, the consumer receives an instant text message with the transaction information, an updated account balance and rewards balance. If the rewards balance meets preset thresholds, a customer can pay for their purchase using those rewards.
The company secured its first bank customer earlier this year, when Colorado-based The State Bank went live with the Bling Nation's Payments Service. Marketed as Redi Pay Bling, the system offers a lower-cost alternative to traditional payments networks and accompanying rewards programmes.
Bling Nation says that withing three weeks of implementation, the bank had activated 25% of its customers on the network and opened more merchant accounts in that span than in the past two years combined.