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Sionic Mobile Corp., a provider of consumer-to-business payments technology, on Tuesday launched CODE Pay a free mobile app for merchants that facilitates bank-to-bank, real-time payments at the point-of-sale.
“Merchants have been looking for ways to cut costs and to get off the card network rails,” says Sionic chief executive and founder Ronald Herman. “Being able to lower acceptance costs and bypass the card networks is a compelling [business case] for merchants regardless of their size.”
Sionic charges a flat rate of 1% per transaction, compared to the average 3% for cards. In addition to lower acceptance costs, the advantage of real-time payments for merchants is the immediate deposit of funds to their bank account, Herman says.
But merchants are not the only beneficiaries of bank-to-bank, real-time payments, Herman adds. Enabling consumers to pay within their means, as opposed to running up credit card debt, is also a part of Sionic’s marketing message. To encourage consumer use of the app, Sionic has built several perks into its platform that merchants can offer. Those perks include discounts at the point-of-sale and free items, for example.
While CODE Pay will initially be available to online merchants, Herman says Sionic is talking to several processors about making the app available on the platform for in-store purchases as well.
The genesis of CODE Pay lies in Sionic’s relationship with the processor Jack Henry & Associates Inc., which provides real-time payments to its bank clients. As Sionic’s relationship with Jack Henry has grown, it has spawned many inquiries from other payment providers about broadening the reach of Sionic’s real-time, bank-to-bank mobile-payments technology, Herman says.
