Confirmation of Payee
The Payment System Regulator (PSR) have recently consulted on their proposed next steps on delivering Confirmation of Payee – a consultation that plans to see over 400 more firms introduce the payment protection measure.
The PSR’s desired outcome is to see this essential fraud protection service increase coverage from 92% of transactions made via Faster Payments (FPS) and CHAPS to 99% worth approximately £2.5 trillion.
Northey Point has responded to the PSRs consultation and published our response in full.
Ahead of the PSR publishing its proposed Direction we have been looking at a case study from the Netherlands published by our friends over at SurePay.
It’s time to act
The latest data from UK Finance states that there were 195,996 reported incidents of Authorised Push Payment (APP) scams in 2021 with gross losses of £583.2 million, compared with £420.7 million in 2020 (an increase of 39%).
The time for banks, building societies and payment service providers to act is now.
Well, this was always going to happen…..: “huge rise in authorised push payment (APP) fraud in 2021, with losses 39% up on the same period in 2020.” The PSR needs to mandate CoP far beyond the big banks. And Kate Frankish is right “we need to share data and technology that can spot the crime and enable banks and payment providers to intervene before it happens.
Louise Beaumont, SVP Global Open Banking & Open Finance Industry & Policy Engagement.
Be “sure who we pay”
Whilst not a silver bullet it is clear that performing a Confirmation of Payee (CoP) check prior to a payment being made is making a significant impact in both thwarting the fraudster by reducing fraudulent payments being made and avoiding misdirected payments being inadvertently sent to the wrong account.
Being ‘sure who we pay’ is central to ensuring trust and confidence in making digital payments – we believe that trust and confidence should be a basic tenant of making a payment.
A journey to achieve widespread adoption and use of CoP
With the UK’s ‘volume players’ having adopted CoP checking, the regulator’s attention is turning to hundreds of ‘smaller volume’ participants in the UK’s payments market.
Dutch firm BNG Bank is an excellent example of a smaller volume participant, focussing on a banking niche and processing batch based payments identifying the opportunities presented by a name checking service – and smoothly implementing a solution.
Creating an optimal, safe customer experience
BNG Bank is a Dutch bank that focuses on business clients in the non-profit sector, including municipalities, housing corporations and healthcare institutions.
BNG Bank became the first bank in the Netherlands to implement the IBAN-Name Check and Switch Check services from SurePay. Customer reactions are very positive and BNG Bank looks back with satisfaction on the smooth implementation.
SurePay introduced the IBAN-Name Check to make online payments safer and more personal. After the successful implementation at the major banks, customers also asked BNG Bank to implement the check.
BNG Bank customers indicated that they expected the check based on their positive experiences in private banking. BNG Bank does not process large numbers of online payments, but mainly batch payments. They therefore saw less incorrectly entered payments (undue payments) or invoice fraud with online payments than other banks.
The benefit for BNG Bank therefore lies in meeting the customer’s wishes and creating an optimal, safe customer experience.
By combining the IBAN-Name Check with the Switch Check, BNG Bank immediately complied with the “Payer Informing At Initiation” (BIBI) regulation of the Dutch Payments Association.
Combination of checks
SurePay’s Switch Check checks whether the account holder has switched to another bank. It is an addition to the IBAN-Name Check, which checks whether the IBAN and name belong together. The SurePay Switching Check returns the new account number in case of a “Match” or “Close Match” result. For example, the initiator of the payment can immediately save it in the address book in the banking app.
As a medium-sized bank, BNG Bank works more often with standard packages and solutions than the large banks. This makes it nice that both checks are now implemented in one flow, which saves unnecessary customisation in the backend.
Integrating the checks into the systems went smoothly.
The combination of the IBAN-Name Check and Transfer Check is highly appreciated by our customers.
Kaj Heins, productmanager BNG Bank
Further opportunities
Kaj continues:
We see opportunities to further expand our good cooperation with SurePay.
For example, with the combination of the IBAN-Name Check and Transfer Check on collection files of our customers.
Kaj Heins, productmanager BNG Bank
Two sprints
The implementation went very smoothly and smoothly.
Within 4 weeks (2 sprints) the connection between our systems and the SurePay API was realised.
We have chosen to call the IBAN-Name Check and Transfer Check from our internet package.
When recording a payment, we make a request and we get the result back immediately.
Kaj Heins, productmanager BNG Bank
Smooth implementation
SurePay offers the services as a SaaS solution, making it a scalable solution with excellent response times. This makes it possible to install clients invisibly for the end user in their own software and banking environment. Naturally, this means that SurePay guides customers in the implementation of the API.
Rather than wait for the PSR to publish their CoP Direction why not request a product brochure from SurePay.