FintekNews is pleased to offer our weekly feature column "3 Questions". Each week, we feature a thought leader within a unique sector of fintech and ask them to answer just 3 questions for our audience in their vernacular. This week we are pleased to introduce you to Ron Herman of Sionic Mobile, a coud-based mobile commerce company based in Atlanta.
Ron Herman
Founder and CEO
Sionic Mobile
www.sionicmobile.com
What does your firm do/offer within the fintech sector?
Sionic Mobile is a cloud-based mobile commerce company that operates the fastest growing merchant marketplace where consumers earn rewards at every mobile checkout, save on personalized products or services and get free perks for paying with their phone.
Our ION Commerce Engine (ICE) underpins corporate clients’ mobile apps reaching more than 150 million consumers in the U.S. We expect the number of marketplace merchant locations, comprised of large chain retailers and small businesses alike, to exceed two million in 2017 making it the largest mobile payments and loyalty network in the nation.
What has been the biggest success & failure in your firm to date?
(Our biggest success was) securing a Full Liability Submitter relationship with J. P. Morgan Chase for processing mobile payments. We were the third company behind Amazon and Uber to accomplish this, and it positions us well to expand with the upcoming Chase Pay and Chase Net platform. Chase Pay is a QR Code-based mobile payment solution offered to Chase Bank and cardholder customers. Chase Net is the result of a long-term contract between Visa and J.P. Morgan, allowing Chase to process its own issued credit cards at a lower cost. Market research shows approximately 24% of U.S. credit cards are issued by Chase.
(Our biggest failure occurred when) we opted to outsource the development of our first generation platform to a local company with offshore developers. The original plan was designed to reduce cost while accelerating the release of our applications in the market. Not only did the project fees quickly exceed budget, but we also ended up scrapping the entire system and hired a team of internal developers. In the end, we wound up settling the dispute through mediation but the experience was terribly distracting and nearly put us out of business.
How do you feel consumers and businesses are adapting to the facet of fintech that your company operates within?
Prior to the release of Apple Pay, neither consumers nor merchants cared too much about mobile payments. Then Google Wallet acquired Softcard’s assets to create Android Pay and Samsung acquired Loop to produce Samsung Pay. Next up, 30-plus big brands formed MCX (Merchant Customer Exchange) with the intent to create their own ACH-based payment rail and reduce credit card fees. Their app, CurrentC, never made it to market.
Fast forward, and we are now embarking on what can only be described as explosive adoption. Merchants and payments companies have finally figured out that most consumers are not inspired to tap their phones to pay at checkout versus pull out a plastic card. To change consumer behavior, merchants and other ecosystem players must wrap three incentives around mobile payments: instant universal rewards, savings on personalized items and services and free perks.
Enter the ability to pay with any iOS or Android phone and any linked bank-issued debit or credit card at millions of places using nothing more than a secure, 3-digit code, and we have a perfect storm.
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Ronald Herman is founder and CEO of Atlanta-based Sionic Mobile. He has 25 years of executive technology leadership experience ranging from early stage start-ups to Fortune 500 companies. Since 2000, Ron has focused exclusively on mobile communications technology, including location-based services, mobile marketing and more recently, cloud computing-based mobile commerce.