As mobile e-commerce grows, more online merchants are adding instant credit options like PayPal Credit and Klarna, giving consumers more ways to finance large purchases separately from using a credit card. Blispay, a Baltimore, Maryland-based consumer finance startup, wants to push this concept further but stops short of offering a full-fledged store-branded credit card.

For more than a year, Blispay has been quietly expanding its smartphone-based instant-credit app, enabling shoppers to borrow significantly more money than the amount of a sought-after item, and providing the extra funds in the form of a Visa account.

The program behaves almost like a store-branded card, but without the physical plastic. It is designed in a way that would appeal to small or midsize stores that don't want to run their own credit programs.

Blispay founder Greg Lisiewski is seeking a new way to extend store credit in the age of m-commerce.

Since the funds come not from the store but from Blispay, it gives merchants a way to provide credit to drive sales at no risk, said Greg Lisiewski, Blispay’s founder.

Lisiewski previously worked at Bill Me Later before it was acquired by PayPal in 2008, and this experience helped him spot untapped opportunities in consumer credit.

“Blispay solves two sides of the credit problem, by providing credit to stores that don’t have the in-house financing options of a big-box store and by giving consumers a versatile line of credit for purchases they don’t necessarily want to put on their everyday credit or debit card,” Lisiewski said.

Merchants supporting Blispay make no technical changes; they simply promote Blispay at the point of sale or on their website with signs or a button directing buyers to apply via Blispay’s mobile website. Applicants are prompted to provide basic information, including their name, email, address, birthdate and Social Security number. The service, targeting customers with healthy credit scores, also asks applicants to create a password before they can be approved.

Approval takes three to five minutes, producing a 16-digit virtual Visa credit card number that appears on the consumer's smartphone within the Blispay app, which can be used immediately to complete a purchase. Blispay typically approves loans of $199 to $10,000, depending on the customer's credit score.

Those who qualify may use the Visa virtual account number anywhere, up to the credit limit and Blispay subsequently mails the borrower a physical Visa credit card for greater convenience.

Blispay charges no interest for the first six months; the interest rate on loans repaid after six months is 19.99%. Blispay customers also earn 2% on all purchases, which is credited back to their account, Lisiewski said.

Utah-based First Electronic Bank issues Blispay’s Visa cards and funds the initial purchase; Blispay immediately buys the loan from the bank and sends monthly bills to customers.

“Blispay works just like a store loan, except we’re the lender and the vehicle for managing the funds is a Visa card, so consumers can use the credit line all over town instead of opening up a separate credit line at several stores,” Lisiewski said.

Merchants that have adopted Blispay include sporting equipment website retailer Evo, the online luxury handbag resale site Trendlee and Laura’s Home & Patio, a home goods store in East Northport, N.Y.

Blispay opted for Visa, because of its ubiquity, and Lisiewski doesn’t expect to add other network options in the foreseeable future.

Since its launch, Blispay borrowers have used its credit at 50,000 online and brick-and-mortar locations to fund purchases from airline tickets to household goods, according to Lisiewski.

“Our product is an option for people who are making an unusual purchase that they want to finance apart from everyday expenses, like buying a good bicycle or a wedding dress or a trip,” Lisiewski said. “The Visa card gives them flexibility for making purchases at places that wouldn’t otherwise offer financing.”

The 25-person company, which received $12.75 million in seed funding last year from FirstMark Capital and others, will soon expand to a major regional retail chain and also is negotiating for additional equity and to expand its debt function, Lisiewski said.

“Based on our momentum, we expect to double our volume by next year,” he said.

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