Page 16 - GS220701

Views

small Atlanta-area merchants—a test-run of sorts. Sionic's
Insider’sreport Pay-by-Car service is slated to launch this fall, he said.

on payments Bank-to-bank, account-to-account, person-to-person

Bank-to-bank payments are the latest iteration of person-
to-person payments. Consumer usage of P2P mobile apps,
The 'Great Allocation' like Zelle and PayPal, has been growing in recent years,
primarily as a replacement for cash and checks.
in digital payments The Federal Reserve, which keeps tabs on consumer
spending habits, reported the share of monthly P2P
begins payments made using mobile apps nearly doubled from 15
percent to 29 percent between 2020 and 2021. Cash usage,
on the other hand, fell from 57 percent of P2P transactions
By Patti Murphy to 49 percent. Checks accounted for 9 percent of monthly
P2P payments in 2021, down from 13 percent in 2020.
ProScribes Inc.
A recent survey by LendingTree found 84 percent of
eal-time payments are coming to a POS near consumers have used a mobile P2P payment app. The
you, real soon. Sionic, an Atlanta-based pay- number rises to 91 percent for both Gen Z (18 to 25-year-
ments company, recently unveiled its new POS olds) and millennials (26 to 41-year-olds).
R payments service, Pay-By-Bank. As the name
implies, the service supports bank-to-bank digital pay- "P2P is effectively replacing cash and check payment
ments from consumer to merchant accounts, initiated at the options," said Jordan Hirschfield, research director at
POS, or even in a car. There's also an option for merchants Mercator Advisory Group.
to incent customers to use the service, including discounts.
Think cash discounts. Among merchants recently surveyed by The Strawhecker
Group and the Electronic Transactions Association, 82
"This is a good step forward in helping merchants combat percent reported accepting at least one digital P2P payment
inflation," Ron Herman, founder and CEO at Sionic, said in option. Ninety-three percent of those merchants plan to
a statement. "From local businesses to global enterprises, continue accepting P2P options.
merchants continue to be plagued by credit card fees."
Consumers, too, have "amassed an abundance of late "More and more—especially among newer establishments
fees" with card issuers, he noted. "Bringing instant digital and gig workers—merchants are responding to consumer
bank payments to commerce provides a new way to more demand by allowing them to pay through P2P digital
equitably reallocate value back to both the merchants and options," said Jared Drieling, senior director of merchant
consumers. The Great Reallocation of digital payments is intelligence and insights at TSG.
here," he said.
Reasons merchants gave for accepting P2P payments
Sionic is not trying to squeeze banks or other legacy players included ease of use and a way to appeal to younger
out of the POS payments market, Herman explained in consumers. Complaints included unexplained holds and
an interview. "This is inclusive," he said. "Anyone selling other delays, and high fees.
[merchant services] can sell this." Delays are likely due to the fact that when money is
exchanged through a P2P network like Venmo it goes into
The company is working with leading acquirer Shift4 and the recipient's Venmo account, not their bank account.
will work with additional payments companies "down Services like Sionic eliminate the need for such holding
the road," Herman said. Other Sionic partners include accounts and make funds available to merchants nearly
Jack Henry & Associates, a technology services company instantaneously.
supporting banks and credit unions, Visa's CyberSource,
and Google (which is providing cloud support). Sionic also Sionic appears to be the first company to introduce a bank-
has a partnership with General Motors to support in-car to-bank payment option for merchant checkouts, though
payments, he noted others can be expected to follow. Don't expect merchants
to 86 card acceptance, though, as Pay-by-Bank will become
Pay-by-Bank transactions clear through RTP, the real-time just one of a plethora of POS payment options.
payments network built by The Clearing House, a payments Perhaps most importantly, banks, ISOs and MLSs can
company owned by the nation's largest commercial banks. create new revenue streams by offering a pay-by-bank POS
RTP reported it handled 36.8 million transactions valued solution.
at $15.7 billion in the first quarter of 2022. Herman told me
Pay-by-Bank will be going live this summer with several Patti Murphy is senior editor at The Green Sheet and self-described pay-
ments maven of the fourth estate. Follow her on Twitter @GS_PayMaven.
16