It’s not a silver bullet but…

It all stared with a Which? Super Complaint in 2017 demanding that banks in the UK must do more to protect its customers from Authorised Push Payment (APP) fraud.

In 2020 the Confirmation of Payee (CoP) service was formally launched in UK to help reduce fraud and misdirected payments.

Confirmation of Payee helps protect consumers and businesses from certain types of fraud and misdirected payments by letting them know if the account name they have entered matches the account name of the recipient.

The Confirmation of Payee service seeks to give businesses and consumers greater assurance that they are sending payments to the intended recipient.

Whilst not a silver bullet, the implementation of Confirmation of Payee is expected be an effective way of combatting Authorised Push Payment Scams (e.g. where a fraudster tricks their victims into willingly making a large bank transfer to them).

Confirmation of Payee also helps to avoid payments being sent to the wrong account due to ‘fat fingers’ (keyboard errors) when we type in somebody’s Sort Code and Account Number.

UK Finance report that the industry prevented £1.6 billion of fraud in 2020. It achieved this through sophisticated detection systems, initiatives like Confirmation of Payee and warnings at the point where the customer is about to make a payment.

Despite this, In 2020 we saw total fraud as reported by UK Finance members reach just over £1.26 billion. While we have seen figures for what we might call traditional fraud such as card and cheque fraud fall, we have seen increases in remote banking fraud and cases of authorised push payment (APP) fraud.

For the benefit of the PSP’s, to protect the payer and to thwart the fraudster surely service ubiquity should be mandated by the regulator and not be left as an optional extra?

UK Case Study: SurePay

Earlier this week Confirmation of Payee solution provider SurePay held a public webinar to share their Confirmation of Payee experience.

It is important to note that we don’t have any connections with SurePay (and there are other organisations providing solutions) but here’s a summary of what we heard:

SurePay’s stated aim

At SurePay, our aim is to protect both our clients and their customers against the growing threat of fraud, giving them the reassurance their payments are going to the intended recipient.  We are proud of the best in class protection we offer and the positive difference our service is making to all of our clients.” 

David Jan Janse, CEO

SurePay’s journey

From the launch of the world’s first CoP service in 2017 to almost 4 billion checks by 2021, SurePay’s joinery has been swift.

Here’s our interpretation of SurePay’s journey:

Information source: SurePay webinar 13 July 2021 & Infographic: Northey Point

SurePay’s sound bite ‘take aways’

If you are keen on ‘take aways’ here’s ten that we picked up from the webinar:

  • Adoption has been swift: 30+ banks and 150+ corporates have on-boarded the SurePay solution.
  • Increased CoP coverage has seen a fraud flight to the UK and non CoP enabled banks. 
  • Insurance companies have seen strong use cases regarding on boarding and claim pay out CoP checks.
  • A webinar poll asked whether attendees felt safer using banks offering a CoP check with an attendee poll result of 100% ‘yes’!
  • Consumer trust in CoP can be an issue – and trust will be built with helpful consumer education of what to do if you receive a partial or no match response when making a payment.
  • Consistency of standardised processing and messaging will also help build trust and remove consumer nervousness when making payments.
  • APP Fraud equated to £479m in 2020, whilst not a silver bullet CoP checking has made a significant impact in what could have been an even larger and bumper payout for fraudsters.
  • The scope of the CoP service could be enhanced by the support of additional data. Additional data such as: how long has the account been open and what is the age of the account holder might influence sending bank decision making and messaging.
  • The Dutch service checks every payment yet in the UK (generally) only new payment beneficiary checks are made.
  • The CoP service could be developed to include bulk payments, cross border payments, client on-boarding and enhanced data points.

Two final facts from SurePay

Face 1: SurePay are reporting the following match results from their live service:

Source: SurePay

Fact 2: Netherlands COP warnings have led to a drop in fraud of 81%.

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