Confirmation of Payee

Confirmation of Payee is a new name checking service for UK-based payments which has now been successfully implemented by a number of UK banks, building societies and other payment service providers (PSPs). The aim of the service is to reduce certain types of fraud as well as misdirected payments. Today, volumes of Confirmation of Payee requests are averaging more than one million.

Before the service was implemented a payer would provide their PSP with all the payee’s details, including their bank sort code and account number together with the name of the person or organisation they were intending to pay. The sort code and account number were then used to route the payment in accordance with the instructions given, however, there was no facility for the payer to check and confirm the name on the account being paid ahead of the payment being sent.

Confirmation of Payee is a way of giving payers greater assurance that their payments are being routed to the intended recipient and therefore are not being accidentally or deliberately misdirected. In particular, it addresses certain types of authorised push payment fraud by providing a platform for PSPs to provide effective warnings to payers about the risks associated with progressing with a payment to an account where the name does not match.

Pay.UK has formulated the rules and standards for the first release of the Confirmation of Payee service (referred to as Phase 1), together with detailed operational guidance for new participants. As a result, any PSP eligible for Phase 1 can apply to join. In the next section there is more information on eligibility for Phase 1 and also about the next planned release of Confirmation of Payee.

How Confirmation of Payee works

Confirmation of Payee allows a payer to check that the name (including a personal / business account indicator) they give for a new payee is the same as the account name / type held by the payee’s PSP.

Stakeholder engagement

Pay.UK worked with stakeholders from across the industry to test and validate the Confirmation of Payee proposition and support the technical development of the Confirmation of Payee solution. This consultation process included testing with Pay.UK’s End User Advisory Council as well as independent research.

Details of the research findings and recommendations and how they were used by Pay.UK in finalising the Confirmation of Payee proposition, rules and guidance are available in the below report.

Confirmation of Payee - Phase 1

In recognition of the complexity of the new service, Confirmation of Payee is being developed in stages based on technical enablement and eligibility criteria; Phase 1 is live and open to eligible participants. If you are interested in applying, contact us.

From a technical perspective, Phase 1 of Confirmation of Payee includes the provision of name checks only on accounts addressable by account number and sort code (i.e. with no additional reference required).

To be eligible to enrol in Phase 1, a participant must also meet the following criteria:

  • Be an account servicing PSP
  • Have a sort code allocated with their own bank code in the EISCD
  • Be an FCA registered entity
  • Be registered as a full member of Open Banking for Payment Services Directive 2 (PSD2) purposes*.

*Please note: registering with Open Banking is a requirement, but can be undertaken in parallel with the Confirmation of Payee application process.

Confirmation of Payee - Phase 2

Building on the success of Phase 1, Pay.UK is now progressing a new phase of Confirmation of Payee (Phase 2) which will enable broader participation to create a ubiquitous capability for all account holding PSPs, if they choose to join. Current plans include enabling the service for the following:

  • Smaller PSPs unable or unwilling to meet the full Open Banking PSD2 membership requirements
  • PSPs regulated by non-PSD2 National Competent Authorities, such as those in the Crown Dependencies
  • PSPs that do not own their own sort code in the EISCD
  • Accounts addressable by secondary reference data.

Pay.UK is working with the payments industry to define the timeline for when these new service elements roll out during 2021 and beyond. Any potential new participant interested in finding out more about Confirmation of Payee Phase 2 should contact us.

Confirmation of Payee technical solution providers

Pay.UK has been informed by a number of firms that they are developing or have developed technical solutions for PSPs wishing to adopt the Confirmation of Payee service. Any PSP wishing to know the names of these solution providers or any firm wishing to be included on the list is welcome to contact us for this purpose. Please note Pay.UK does not endorse or accredit any of the solutions or providers included in the list.

More information