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Global: Cities Let Citizens Pay Bills with ‘Bling’
Source: govtech.com
Source Date: Friday, September 17, 2010
Focus: Institution and HR Management
Created: Sep 20, 2010

Bling Nation sounds like a bad reality TV show starring timepiece-adorned rapper Flavor Flav. But it’s not (unfortunately).

In real life, it’s much more useful. The Palo Alto, Calif.-based service allows smartphone users to pay instantly with one swipe at participating stores and other locations. Now, a few municipalities, including the city of Palo Alto, are offering Bling Nation as another method for residents to pay their utility bills and parking tickets.

Here’s how it works: Bling Nation is much like a debit card. A Bling “sticker” is slapped onto a smartphone. When consumers want to make a purchase with Bling, they simply bump their Bling tag on a Blinger box reader at the participating merchant or now, the government. Money is automatically deducted from the person’s Bling account, which is set up through a local bank or PayPal. A real-time transaction confirmation is then sent directly to the phone via text message.

As an incentive, Bling users can also choose to participate in a loyalty program in which they earn coupons or discounts with participating stores and restaurants each time they use this payment method.

In Palo Alto, at least 75 merchants take payments through Bling, said Tommy Fehrenbach, economic development manager for Palo Alto. And now citizens can pay off their utility bills and other financial obligations at a Bling reader located at the city’s payment counter.

“Say I got a parking ticket and I wanted to pay with Bling,” said Fehrenbach. “If I had the service set up, I could just come in to our first floor here and tell them who I am, show them my ticket, pump it through the server — and then when it’s time for the payment, instead of a credit card, the city worker will just pull out the Bling machine [tag reader], and I wave my phone and tap the Bling machine with my phone.”

Citizens can still pay the city by credit card, cash or check, but Bling is the newest way. “They made it relatively easy for us to use their solution as just another way that folks can pay, and we thought it was a great idea,” Fehrenbach said. “They’re located in Palo Alto, and they may very well have something in terms of how people make payments.”

Lamar, Colo., is also accepting Bling as a payment option, according to a recent announcement from the company. Fehrenbach said these tap-and-pay payment systems could become attractive for both governments and businesses because their per-transaction fees are typically lower than the big credit card companies.  

Some futurists believe that in the near future, the smartphone will have all the same functionality as today’s credit and debit cards. In fact, some major credit card companies and big banks have begun pilots of the technology, including one in September, which would allow smartphone users to do point-of-sale purchases on their mobile devices. According to IntoMobile.com, this new technology may or many not require special “near-field communication” chips that facilitate short-range communication between a wireless device and a reader (such as the Blinger box).

Bling is just one of several competing “tap-and pay” systems competing for this new market. The BlingTag is a quarter-sized microchip embedded in the sticker.

According to the company, the Bling payment method is secured via an encrypted network. “No personal data is stored on the BlingTag or on the Blinger,” according to the company. Users also make a PIN that prevents transactions from being made on lost or stolen phones.
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