Page 22 - GS241001

CoverStory

lem is that A2A schemes lack structural chargeback mech- The consumer experience
anisms and the rewards systems that have become com-
mon to card systems, the report stated. Pay-by-bank entails a seven-step process for consumers,
Chris Colson, payments expert at the Federal Reserve
Ronald Herman, founder and CEO of Sionic, an Atlanta- Bank of Atlanta, explained in an August post to the Re-
based digital payments company, said his company serve Bank's website.
is addressing these problems head on. Sionic built a 1. Select "pay by bank" option at checkout
comprehensive fraud detection and mitigation service 2. Choose your bank from a provided list, or enter
exclusively for real-time bank-to-bank payments at its name
checkouts, whether those be online, mobile or in-store.
3. Be directed to the bank's website
Sionic can provide instant dispute resolution. Leveraging 4. Log in with your online banking credentials
AI technology, disputes are resolved instantly between
buyers and sellers without bank involvement. The solution 5. Authorize payment
even incorporates a bank perks pass that allows users to 6. Confirm transaction
earn instant perks from participating merchants. 7. Optionally, save bank details for future use

Sionic has been working with Jack Henry & Associates Can Walmart move the needle?
(JHA) and Google Cloud Computing, to develop specific
use cases. Slalom, a global technology firm based in Seattle, Recently, Walmart, which has long been a critic of inter-
which specializes in creating artificial intelligence-based change, made headlines when it revealed an agreement
synthetic data, supports data creation to train models for with Fiserv that will allow online shoppers to make real-
Sionic based on its global bank fraud detection practice. time payments directly from their bank accounts to the
retail behemoth.
"We are invested heavily in a comprehensive and
innovative instant payments system, with the kind of Herman believes the arrangement between Fiserv and
security that is lacking in today's real-time payment Walmart will move the needle on pay-by-bank adoption at
landscape," Matt Watson, chief technology officer at Sionic the point of sale. "We are promoting the heck out of that.
said in a press release. Even though Walmart/Fiserv's pay-by-bank is for online
only and requires Walmart's wallet, it supports our busi-
Financial institutions participating in either real-time ness model nicely," Herman said.
bank payment rail (FedNow or RTP) and wanting to offer
pay-by-bank commerce services to their business and A spokesperson for Fiserv said Walmart is one of "multiple
personal account holders will be required to participate in large enterprise clients leveraging our pay-by-bank capa-
Sionic fraud protection services. bilities," which currently utilize the ACH. In September
2024, Fiserv and Walmart completed the first such trans-
Sionic plans a beta test of its bank-to-bank payment actions over real-time payment rails. "The real-time rails
network this fall, which will be open to small and midsize used were the proprietary Fiserv NOW network," not Fed-
merchants as well as enterprise retailers. The solution will Now nor RTP, though those may be used in the future, the
become available for ecommerce, in-person and eventually spokesperson said, adding, "That transaction was a proof
in-vehicle commerce transactions, Herman said. of concept."

Sionic is working with JHA to integrate its solution with "The key for Fiserv is enabling payment choice – both for
JHA's PayCenter, which hosts about 800 FIs. The company the merchant in terms of how they get paid, and the con-
also has access to about 1,500 Google Cloud platform sales sumer in their options for ways to pay," the spokesperson
reps who can sell its solution directly to retailers. noted.

Herman said the solution can also be offered by ISOs Separately, Casey Klyszeiko, head of Carat and global
and agents. "They need to offer their customers multiple ecommerce at Fiserv, said in an email that the tech giant is
payment methods to stay relevant, including pay-by-bank," "uniquely positioned at the intersection of merchants and
he said. "The feedback we are getting is that resellers view financial institutions, allowing us to help our clients ex-
pay-by-bank as an acquisition and retention tool." ecute on these new and innovative payment experiences."

Consumers will learn about pay-by-bank from their FIs Fiserv's own research points to consumer awareness and
and need only tap or click to agree to enroll their checking demand for A2A/pay-by-bank payments both within bill
accounts, selecting either their Apple or Google wallet for pay platforms and merchant wallets. Seventy-eight per-
payments and the collection of perks. Sionic can "support cent of those polled earlier this year said they were aware
NFC or QR Code checkouts natively within the wallets," of pay-by-bank as a payment option. The research also
Herman said. found that 40 percent of consumers actively use pay-by-

22