Why Pay by Bank?

An Uncertain Future of Instant Payments in the US.

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Tedd Huff and co-host Matt Vanhouten, along with special guest Dean Nolan, the Managing Director of Commercial Payments at SRM take a deep dive into Pay by Bank and it’s uncertain future in the US." 

Dean brings to the show an extensive background with the US payments ecosystem from the US Faster Payments Council, executive director of PayCLT, payments patent owner, and more, which provides a unique lens through which we explore the intricacies of Pay by Bank systems.

The episode’s journey through the concept of Pay by Bank is a novel approach to financial transactions that circumvents traditional payment methods, allowing consumers to directly transfer funds from their bank accounts to merchants or service providers. This method promises to streamline the payment process, potentially reducing costs and enhancing security for all parties involved. However, as they clarify, the path toward widespread adoption of Pay by Bank in the U.S. is fraught with challenges, including regulatory hurdles, the critical need for real-time fraud prevention measures, and the required paradigm shift in consumer and merchant acceptance.

Much of this discussion expresses the technological advancements propelling Pay by Bank into the spotlight. Innovations such as APIs, Instant Payments, FedNow, and RTP are dissected, revealing how they contribute to the efficiency and security of real-time transactions. These technologies are being touted as the next great thing in payment transactions, but they also introduce complexities in implementation and adoption for everyone.

We explore the pivotal role of intermediaries in the Pay by Bank ecosystem, including banks and payment processors. The influence these intermediaries have on transaction costs and the overall user experience cannot be overstated, as they could make or break Pay by Bank's success. Not only that, but we explore the strategic considerations facing financial institutions as they weigh the benefits of innovation against the potential risks and competitive pressures within the banking sector.

From the consumer’s vantage point, the episode examines the market dynamics and behavioral trends that influence the adoption of Pay by Bank. The psychological barriers and practical considerations that sway consumer preferences are thoroughly analyzed, providing a nuanced understanding of the factors driving consumer behavior in the financial services market.

Speculating on the future of Pay by Bank, the episode offers forward-looking insights into emerging use cases, their impact on merchant-consumer transactions, and how the regulatory framework might adapt to support this innovation. It discusses the potential for Pay by Bank to revolutionize low-value transactions, such as micropayments, highlighting the conditions necessary for consumers to embrace this method for everyday transactions.

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Key Highlights:

  • Exploring 'Pay by Bank' Solutions: Unveil the simplicity of Pay by Bank, a game-changer in financial transactions that links consumer bank accounts directly to merchants, moving away from traditional card dependencies. Discover how this approach is streamlining purchases.

  • Revolutionizing Payments with Technology: APIs, Instant Payments, FedNow, and RTP are transforming the banking sector, making transactions quicker and more secure, and setting a new standard for the future of commerce.

  • Overcoming Adoption Barriers: There are many challenges blocking the widespread acceptance of Pay by Bank, from regulatory hurdles to the necessity of universal consumer and merchant approval.

  • Intermediaries' Critical Influence: The complex role of banks and payment processors in the Pay by Bank ecosystem, highlighting their impact on transaction costs and the customer experience and their dual function as both enablers and obstacles.

  • Consumer Adoption Factors: Consumer behavior and market trends affect Pay by Bank's integration into daily financial transactions, providing insights into what drives consumer choices and the method's potential to alter payment habits.

  • Strategic Banking Perspectives: How banks and financial institutions strategically approach Pay by Bank, assessing the competitive environment, risk management considerations, and the benefits of adopting such innovations.

  • Predicting Pay by Bank's Future: From potential applications to evolving regulations, predicting how these advancements could redefine the convenience, efficiency, and security of financial transactions.


  1. Evolution of Pay by Bank: A Modern Twist on Traditional Banking - Highlight how Pay by Bank innovates on the timeless concept of money movement, transitioning from checks to digital transactions. Stress the continuous evolution and the blend of tradition with cutting-edge technology.

  2. The Essence of Real-Time Payments: Beyond the Hype - Focus on the broader implications of Pay by Bank beyond just real-time transactions, emphasizing direct, secure money transfers that benefit consumers directly.

  3. Banks and Real-Time Payment Adoption: Navigating Challenges - Explore the reasons behind banks' hesitation to fully embrace real-time Pay by Bank solutions, discussing the balance of fraud prevention, regulatory compliance, and cost-benefit analysis.

  4. Consumer Benefits of Pay by Bank: Why Make the Switch? - Discuss what's at stake for consumers with Pay by Bank, underscoring the incentives like cost savings and convenience that could drive widespread adoption.

  5. Zelle's Role in Pay by Bank: Simplicity Meets Complexity - Analyze Zelle as a case study in Pay by Bank's potential and challenges, including the ease of use versus the limitations in transaction reversal and fraud protection.


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Time Stamps:

00:00 Welcome to FinTech Confidentials Uncut: Pay by Bank Deep Dive

00:32 Introducing Dean Nolan: A Payments Industry Veteran

01:42 Defining 'Pay by Bank': Experts Weigh In

03:34 The Evolution and Technologies Behind Pay by Bank

04:39 Exploring the Real-Time Aspect of Pay by Bank

05:42 The U.S. Focus: Analyzing Pay by Bank in America

07:08 Debating the Inclusion of Card-Based Transactions

21:19 Consumer Protection and Dispute Resolution in Pay by Bank

27:00 The Future of Pay by Bank: Opportunities and Challenges

34:08 Navigating Fraud and Security in Real-Time Payments

35:59 Exploring the Incentives for Banks and Merchants in Payment Innovations

36:35 Community Banking: A Strategy for Growth and Differentiation

37:38 The Merchant Perspective: Costs, Incentives, and Payment Options

39:00 Instant Payments and the Gaming Industry: A Case Study

40:35 Consumer Behavior and the Adoption of New Payment Methods

01:00:58 The Future of Pay by Bank: Predictions and Possibilities

This is a Production of Diamond D3, Media

ABOUT The Guest:

Dean Nolan: Dean Nolan is Managing Director of commercial Payments at SRM (Strategic Resource Management), an independent advisory firm serving financial institutions through strategic consulting, vendor sourcing, and vendor contract optimization.

Dean has 25+ years of experience in payments and financial services, having held leadership positions in payments strategy, innovation, product management, product sales, and software development. Before joining SRM, Dean was Vice President in Treasury Management at Fifth Third Bank, overseeing Faster Payments, Commercial Card, Bank as a Biller, and Merchant Services. In prior roles, Dean was a Senior Payments Product Sales Leader at MasterCard and First Data, Product Leader for Consumer and Small Business Debit, Prepaid, and HSA solutions at Fifth Third Bank, SVP for Card Innovation at Wells Fargo Bank, and SVP for Emerging Debit Solutions at Bank of America.

A self-proclaimed “payments geek,” he is a frequent speaker at industry conferences, workgroup chair at the US Faster Payments Council, executive director of PayCLT, and payments patent owner. He has participated in multiple TCH and FedNow Instant Payment and Request for Payment workgroups. Dean earned an MBA from Marquette University and an MA in Marketing & Information Systems from UW Milwaukee.

About the Hosts:

Tedd Huff is the Co-Founder of Voalyre and the President & Founder of Diamond D3, a consultancy renowned for its expertise in global payments and marketing. With over two decades of experience in FinTech, Huff has played a pivotal role in shaping the industry through his contributions to various startups and established companies, focusing on growth, innovation, process improvements, and enhancing user experience in the complexity of payments.

Matt Vanhouten is a contributor to Fintech Confidential and has been developing and launching payments products for over 20 years. He led Digital Payables and Receivables for North America at J.P. Morgan and Global Visa Direct Product at Visa and had senior leadership roles within multiple payments startups. Matt frequently speaks at industry conferences such as AFP and publishes payments and fintech content on LinkedIn and Medium. He currently leads Product at VGS.

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