US payment infrastructure is resolving the speed limitations of account-based payments as the Federal Reserve's FedNow (launched 2023) and The Clearing House's RTP expand real-time payment rails. Pay by Bank is a payment form built on these rails that combines open-banking-style account linking and balance verification; it's drawing attention because it bypasses card networks, giving it a different fee structure, but consumer awareness is still at an early stage.

It's worth considering first for high-value transactions where card fee burden is significant, and for fintech, investment, and rewards services where account-based funding feels natural. Rather than positioning it as a primary payment method, it's more realistic to place it alongside cards and wallets as a cost-saving option and adjust its placement based on observed usage trends.

When a consumer selects their bank on the payment screen and links their account through online banking authentication, the balance is checked and per-transaction transfer approval follows. The transfer is processed either in real time or on an ACH schedule, depending on the bank and rail combination, and once received, Hecto Financial takes the funds in USD, converts them, and pays out in the currency set in the contract. Because the bank authentication itself serves as identity verification, this is a different authentication scheme from card-based 3-D Secure.

Through Hecto Financial, businesses in Korea can also explore accepting US A2A payments, but Pay by Bank is a method still in its early growth stage where actual usability varies depending on provider and bank coverage. It's recommended to specifically confirm the range of supported banks, the processing rail, and expected usage rates with the sales team before contracting.

• Country of business registration

  Confirm contract eligibility for businesses registered in Korea

• Sales channels

  The integration method and priority vary depending on your online sales channel mix, such as owned storefronts, open marketplaces, and mobile apps

• Product categories handled

  Advance confirmation is needed on whether your business falls under a restricted category per the Pay by Bank (US) operator's merchant policy

• Compliance with local regulations

  Confirm compliance with US payment and foreign exchange regulations, including federal and state consumer protection rules and card network rules (see official sources below)

Once USD originating from the consumer's account is received by Hecto Financial, it is converted and settled in whichever of USD, KRW, or JPY was selected under the contract. Transactions routed over real-time rails tend to have funds confirmed quickly, but the settlement cycle is a separate contract term, and since refunds are processed as a reverse transfer back to the original account, the process differs from card refunds and should be reflected in your operations manual.

• Federal ReserveOfficial information on the US payment system and Electronic Fund Transfer Act (Regulation E). If this page's content differs from the actual regulations, the official source takes precedence.
• Consumer Financial Protection Bureau (CFPB)Official information from the federal oversight body for US consumer finance and payment disputes.