Pay.UK launched the technical specifications for the new service at the end of 2018, now Brian Cunnington – Confirmation of Payee Project Specialist - answers some common customer and stakeholder questions and tells us what’s next for the service.
At the beginning of 2018, Pay.UK was handed the Payment Strategy Forum’s high-level blueprint for Confirmation of Payee. Confirmation of Payee will help prevent misdirected payments including several types of Authorised Push Payment (APP) fraud – where a victim is tricked into sending a payment to a fraudster.
With the help of over 200 stakeholders representing payment service providers, customer groups and regulators, Pay.UK developed the detailed design of the proposition, along with the rules and standards for the service. These were made available at the end of 2018 so that Confirmation of Payee could be implemented by payment providers – including all retail banks and building societies – when they were ready. A number of UK Banking Groups have been given a Direction by the Payments Systems Regulator to enable CoP capability to its customers during 2020 and Pay.UK is supporting these and other participants to help them join as well as exploring how Confirmation of Payee can be further developed.
You can read more about Pay.UK’s engagement with stakeholders regarding Confirmation of Payee in our report “Confirmation of Payee, Understanding Consumer and Stakeholder Perspectives.”
During our engagement we came across a lot of common questions and I have done my best to answer a few of them below. If you can’t find the information you’re looking for please get in touch at email@example.com and the team will be happy to help.
1. What is Confirmation of Payee and how does it work?
Confirmation of Payee is a name checking service. When setting up a new payment, your payment provider will be able to check the name of the person or organisation you give, against the actual name held on the account.
There are three possible outcomes:
- Yes – If you used the correct account name, you will receive confirmation that the details match, and can proceed with the payment.
- No, please check – If you used a similar name to the account holder, you will be provided with the actual name of the account holder to check. You can update the details and try again, or contact the intended recipient to check the details.
- No, the name is wrong – If you have entered the wrong name for the account holder you will be told that the details do not match and advised to contact the person or organisation you are trying to pay.
- How can it benefit me?
The service can help you make good decisions with your money by avoiding certain types of Authorised Push Payment (APP) fraud including:
- Impersonation – When a fraudster contacts a victim pretending to be someone else – often a trusted organisation like the police or the victim’s bank.
- CEO fraud – When a scammer pretends to be a CEO or other senior business official and persuades a member of staff in a company’s finance depart to make payments to a fraudster’s bank account.
In future using Confirmation of Payee may also protect you from loss if you do become a victim of fraud under the Contingent Reimbursement Voluntary Code.
3. How will it be decided whether a name is a match?
This will be determined by the recipient’s (or payee’s) payment service provider (usually their bank or building society). They have access to the most information on the person or business receiving the payment.
4. What payment types will use the new service?
At the moment the service is focusing on ”push payment” transactions such as Faster Payments and CHAPS, which are payments that you initiate and authorise from your account – usually internet or phone payments. Bacs payments including Direct Debits are not included for the time being; however, Pay.UK will consider whether the service can be extended to other payment providers and payment types in the future.
5. How will it affect Bacs batch payments?
Confirmation of Payee is not focusing on Bacs payments for the time being. If payment providers decide to offer it for Bacs payments in the future it will need to be in a way that doesn’t hinder the batch process.
6. If the name matches, will payments happen automatically?
No, your bank or building society will never make a payment without your direct instruction. Once you know whether the name is a match it will always be your decision whether to proceed with a payment.
7. How is my data kept secure?
Payment providers will use the Open Banking directory service and highly secure architecture to safely exchange Confirmation of Payee requests. In addition, to be accredited to use the system companies must undergo rigorous security checks and also be regulated by the Financial Conduct Authority (FCA) or European equivalents.
8. When will it be introduced?
Pay.UK has developed rules, standards and guidance that currently only enable Confirmation of Payee to be implemented for accounts serviced by account number and sort code. In August 2019 the Payment Systems Regulator (PSR) issued a specific Direction to the six largest UK Banking Groups to fully implement CoP by the 31st March 2020. The Direction can be viewed here. It should however be noted that the Regulator has subsequently relaxed this deadline in the light of the impacts of COVID-19 (announced here and these organisations are currently reviewing their rollout plans. As for those banks, building societies and other payment providers not covered by this Direction, it’s up to these institutions to consider if or when they will join the service. In those instances where the provider offers customers accounts serviced by a secondary reference number (e.g. a Building Society roll number) Pay.UK is planning to enable the capability for them to join in the latter half of 2020.
9. Will every bank use Confirmation of Payee?
Although it will be up to individual banks and payment providers to decide how exactly they want to roll out Confirmation of Payee to their customers, retail current account providers have indicated that they expect to take part. When providing the Confirmation of Payee service, both customers and the current account provider will be able to benefit from reduced fraud.
In the meantime if a receiving bank does not offer Confirmation of Payee, the paying customer will be advised that the recipient (or payee’s) account name is unable to be checked.
Those account providers that are reliant upon the use of a secondary reference number (e.g. a Building Society roll number) will be able to join the service when Pay.UK enables the capability, expected to be in the latter half of 2020.
10. Will it stop fraud entirely?
Unfortunately not, but it’s important to remember that Confirmation of Payee is one of a range of measures already implemented and being introduced by the industry to combat fraud. These include i.e. the Contingent Reimbursement Voluntary Code which could mean that more customers are eligible for a refund if their bank hasn’t implemented Confirmation of Payee.