Payment solutions provider Sionic will launch a suite of trust-based services in April to assist with faster settlement times and help alleviate security challenges associated with peer-to-peer payments.  

Payments typically are made through an alias directory for platforms, such as Zelle, which allow demand deposit account credentials to remain hidden, according to Sionic. However, Zelle saw four banks — Wells Fargo, U.S. Bank, PNC Bank and Bank of America — report more than 190,000 scams that led to $213.8 million in losses during 2021 and the first half of 2022, according to a report published by U.S. Sen. Elizabeth Warren (D-Mass.) in October 2022. 

No single company or governmental body owns the rights to the directory, so it is difficult to authenticate users and verify that payments are sent to trusted recipients, Sionic Chief Executive Ronald Herman told Bank Automation News.

With its Verified Rapid Payments solution, the company “set out to build is the ability for a buyer or a seller, a bank or a merchant to be able to tap into … a system that is secure,” Herman said. “That requires a crypto signature, and then that crypto signature is really what authenticates the buyer and the seller, or the payer and the payee.” 

Cryptographic signatures are the signing of verified credentials and transactions by trusted payers and payees and constitute a key security element of the company’s payments architecture, Herman added. 

Instant dispute resolution

Along with verification of identities, the suite of services provides for those sending and receiving payments to resolve disputes instantly, allowing faster payments and relieving banks of these responsibilities, Herman told BAN. 

“There are no chargebacks in the bank-to-bank [payments] world, which is both good and bad. But there’s also no layer of dispute resolution that exists for any kind of bank transactions,” he said. “By including an automatic dispute resolution that occurs instantly between payer and payee, we’ve really removed that level of support from [banks].” 

Sionic has been developing its trust-based model since 2018 and will release it on the RTP Network and FedNow bank rails once it becomes available this summer, according to a company release. 

Smaller banks, such as $210 million, Arcadia, Fla.-based Crews Bank and Trust and $382 million, New Brunswick, N.J.-based Brunswick Bank and Trust, that use Jack Henry’s Banno Banking platform, will have access to the trust-based services once the suite goes live, Herman said. 

“Sionic will use a plugin card to directly integrate its Verified Rapid Payments service into the Banno digital banking platform dashboard. The addition of its trust-based payments features will be available to the more than 600 banks and credit unions on the Jack Henry platform,” Tede Forman, President of Payment Solutions at Jack Henry told BAN. 

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