Bling Nation Adds A Paypal Option To Cell Phone Payments

Startup Bling Nation has landed a pretty major deal with PayPal, we’ve learned. Bling Nation’s payment systems addresses physical goods in merchant stores and will now allow consumers to use their payment chips to deduct funds from a PayPal account.

Here’s how Bling Nation works. The startup partners with banks, who then offer the consumers who use their services a Bling Nation and “Bank” branded chip that can be stuck onto any cell phone device. The chip will allow any user to make a payment directly out of their checking account similar to a debit payment. Bling Nation also partners with all of the local merchants in given town, to give them special “Bling Nation” credit card machines that will scan the chips.

The payment device will calculate the number of times a payee has made a transaction and as an added bonus, will automatically award the user with coupons, points or discounts, which the merchant determines. The device will read the chip and deduct the money for a purchase out of the payee’s bank account. Bling Nation even allows merchants to implement a security feature, in which upon purchase, the customer will have to enter a PIN code for larger transactions.

With the deal with PayPal, anyone will be use Bling Nation to link a PayPal account and receive tags that they can then stick to their cell phones. You may also be able to enroll during the checkout process as well. And Bling Nation in turn will equip merchants in given areas with payment devices that work with the chip.

This is a big win for Bling Nation’s system, which originally had ambitions of solely focusing on hyperlocal banks in small communities. The PayPal integration is currently being tested in Palo Alto and is steadily being rolled out nationally. Most of the work involves distributing the payments devices to local merchants.

Enrollment is limited for now, says co-founder Meyer Malka. Consumers can sign up for the service at participating merchants and eventually through the web. The deal also represents a way for consumers to start paying for physical goods, not just online purchases, with their PayPal accounts.

Bling Nation recently raised a whopping $20 million in funding to scale its system. Armed with a deal with PayPal, the startup is well on its way to making it into stores nationwide.

And PayPal is one step closer to fulfilling its futuristic vision for the payments platform, as shown in this video.