Pay.UK launched the technical specifications for the new service earlier this year, now Brian Cunnington – Confirmation of Payee Project Manager - answers some common customer and stakeholder questions and tells us what’s next for the service.
At the beginning of 2017, 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 have been developing the detailed design of the proposition, along with the rules and standards for the service. By the end of the year, the work will have been completed so that Confirmation of Payee can be implemented by payment providers – including all retail banks and building societies – during 2019. Now Pay.UK is supporting participants to help them join the service as well as exploring how it 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 firstname.lastname@example.org and the team will be happy to help.
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 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 purporting to be someone else – often a trusted organisation like the police or the victim’s bank.
- CEO fraud – When a scammer purports 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.
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.
What payment types will use the new service?
At the moment the service is focusing on ”push payment” transactions, 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 future.
How will it affect Bacs batch payments?
Confirmation of Payee isn’t 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.
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.
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.
When will it be introduced?
Pay.UK has developed rules, standards and guidance to enable Confirmation of Payee (CoP) to be implemented by some 300 banks, building societies and other payment providers. In May 2019 the PSR put forward its proposal for timescales relating to when payment service providers should implement CoP. Their proposal can be viewed here.
Will every bank use Confirmation of payee?
Although it will be up to individual banks and payment providers to decide how exactly to roll out Confirmation of Payee to their customers, retail current account providers have indicated that they expect to take part. It benefits current account providers to offer the service as it reduces fraud and benefits their customers.
In the meantime if a receiving bank does not offer Confirmation of Payee then the paying customer will be advised that the recipient (or payee’s) account name is unable to be checked.
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 industry to combat fraud. These include the Contingent Reimbursement Voluntary Code that could mean more customers are eligible for a refund if their bank hasn’t implemented Confirmation of Payee.