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Bling Nation was also tarnished by pending rules that would drastically lower the fees that banks earn from retailers on debit card purchases.

“When you’re issuing anything that requires a hard product or hardware, both on the tag side and on the merchant side, you’ve got a very expensive proposition,” said Todd Ablowitz, the president of the payments consulting firm Double Diamond Group in Centennial, Colo. Ablowitz is doubtful about whether Bling Nation’s payment network will come back to life, but says shutting it down was a smart move in light of competitive mobile payment projects that have recently arrived on the scene. He said he understands how it would cast doubts but he is not ruling them out.

“If you look at very successful startups, they often change one or more times,” Ablowitz said. “Great entrepreneurs recognize when something’s not working and don’t spend one dime too much when it’s not working.”

American Banker, June 8, 2011