From the January 2011 issue of Entrepreneur
Mobile payday: Casares of Bling Nation and Fraiche's Gur.
Mobile payday: Casares of Bling Nation and Fraiche's Gur.
Photos© David Johnson

Fraiche knows a thing or two about serving active cultures. An organic yogurt café with three locations across California's Silicon Valley and Bay Area, the company specializes in homemade, healthy treats for the go-go techies and students that make up the heart of its customer base.

"Fraiche is a convenience play. We like to catch people on the go, when they're busy," says co-founder Patama Gur. "We're focused on real foods, not sugar-free or fat-free. Yogurt is one of the most nutritious things you can eat."

Targeting a youthful, forward-thinking demographic means Fraiche can do things other businesses can't, Gur says. And not just in regards to its menu, either.

"Our clientele is very open to being on the cutting edge and trying new things," she says. "And given our location, we get approached all the time by startups who want to work with us."

That includes Bling Nation, the developer of mobile payment solutions that's behind BlingTags--quarter-size microchip stickers that affix to any wireless handset and let consumers pay for purchases at participating retailers regardless of their phone type. BlingTags link to a user's PayPal account, debiting purchases without sharing personal information and sending text messages after each transaction. A PIN code restricts BlingTag use if a phone is lost or stolen.

"Everyone carries a cell phone," Gur says. "Paying for yogurt using [a] phone is a far more convenient method than carrying a wallet or a purse."

Merchants benefit as well, says Wences Casares, co-CEO of Bling Nation. The Palo Alto., Calif., firm supplies each retail partner with a BlingBox--a starter kit featuring an RFID reader terminal (or "Blinger," powered by electronic payment technologies provider VeriFone), 100 BlingTags and marketing materials. The Blinger plugs in to any electrical outlet at the point of sale and requires no additional integration with the existing POS system--a rejoinder to critics who argue mobile payment infrastructure is too costly and complex to achieve widespread penetration.

Bling Nation recommends that merchants give out BlingTags to their best customers, noting that in addition to payments, the stickers also can support loyalty rewards programs and related marketing initiatives.

"This is how you can communicate with customers and give them preferential treatment," Casares says. "BlingTags are replacing loyalty cards--each tag gives you access to doing a lot more things with the same customers. We're creating more value for everyone." That includes reducing merchants' credit card processing fees. Bling Nation charges a flat 1.5 percent fee on all transactions, Casares says, which can result in savings of as much as 50 percent compared with standard Visa and MasterCard fees.

BlingTags could soon rival cold, hard cash as the currency of choice in the Palo Alto area: In addition to the hundreds of local merchants offering the service, Facebook and Stanford University are distributing the stickers across their respective campuses, with about 10,000 BlingTags in active use as of late 2010. Retailers in five other states have implemented the BlingTag solution as well. In addition, Bling Nation has worked with partners like consumer review website Yelp to mount open-house events and pub crawls promoting the tap-and-pay concept.

"We don't see a downside. The BlingTag solution is so easy to implement, and it doesn't cost much," Gur says. "People here in Silicon Valley are very excited about it, and we're excited to reach out to our customers and get to know them more. We want to be part of people's lives every day."