Updated: 7 July 2020

What is Confirmation of Payee?

A Confirmation of Payee (CoP) service has been 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.

Pay.UK, the company which runs the infrastructure and services necessary for the UK’s interbank retail payments to happen revealed that 34 per cent of consumers have in the past made a bank or building society payment to a person using a nickname whilst over a third (37 per cent) of business brands also trade under a different name to that on their business bank or building society account.

The research was released just a few days before a number of UK banks and building societies completed the first phase of introducing the Confirmation of Payee (CoP) account name checking service.

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.

The end of payment nicknames

If your bank or building society is CoP enabled, the service will let you know if the account name you have entered matches the account name of the recipient, helping to protect you from certain types of fraud and making misdirected payments.

CoP means that when an individual or business sets up a new payee, or edits an existing payee’s details, they will need to know the sort code and account number plus the account name of the individual or business they are paying.

They will also be asked whether they are intending to pay into a business or personal account.

If your bank or building society is CoP enabled, the service lets you know if the account name you have entered matches the account name of the recipient.

If the account name of the recipient you are paying does not match their bank account, the bank will advise you to contact the person or business you are trying to pay to get the correct details

First Name | Surname

Recently, Pay.UK reminded us of the importance of using ‘first name surname’ rather than a nickname when setting up or amending payment details.

Protecting individuals and businesses against certain types of fraud is hugely important. The introduction of CoP means that people will get confirmation that the account name they enter matches that of the individual or business they are paying into and so helps protect them against certain types of fraud and misdirected payments.

Our research highlights that people don’t always use the actual account name of the person or know the business name they are paying. Moving forward it’s important everyone uses the exact name that is registered to the account every time they set up or amend payment details. This is typically first name and surname”.

Paul Horlock CEO, Pay.UK

Why is Confirmation of Payee being introduced?

UK Finance (the collective voice for the banking and finance industry) report that the industry they represent report that there were 122,437 Authorised Push Payment (APP) frauds in 2019 and loses hit £456 million – with only about 25% of these loses being returned to the victim.

Not surprisingly the banking industry is responding to this type of fraud. The introduction of Confirmation of Payee is one of a number of initiatives to reduce payment fraud and make our money safer.

Confirmation of Payee introduces some payment friction to online payments but if the initiative goes some way to mitigate fraud, and reduces the stress of sending money to people, then a small bit of friction is a reasonable price to pay.

What type of payments are impacted?

At launch, the following types of UK based payments will be subject to Confirmation of Payee checks:

  • Faster Payments
  • CHAPS
  • “Book Transfers” (i.e. the accounts of both the sender and the receiver of the money are at the same bank).

Confirmation of Payee checks for payments made via Bacs Direct Credit and Direct Debit are not included in the first phase of this new service.

Also, international payments (cross border transfers) and cheque payments are not part of the payment mechanisms in scope of the first phase of the Confirmation of Payee service.

When will my bank start using Confirmation of Payee?

On 1 August 2019, the Payment Systems Regulator (PSR) gave a Specific Direction to members of the UK’s six largest banking groups to fully implement Confirmation of Payee by 31 March 2020.

Payment System Regulator Specific Direction 10

The CoP service was originally due to go live by the 31 March 2020 with Bank of Scotland, Barclays, HSBC, Lloyds, National Westminster, Nationwide, Royal Bank of Scotland, Santander and Ulster Bank all required to start performing Confirmation of Payee checks when a customer made a first payment to a third party.

All these banking groups have been directed, by the regulator, to introduce the Confirmation of Payee service.

Given that the directed banks were managing COVID-19 related risks and were working hard to protect their customers the PSR advised banks that they must take appropriate steps to roll out CoP to a revised deadline of 30 June 2020.

Starling Bank, Halifax, CooP and Monzo have chosen to voluntarily participate in the Confirmation of Payee service and it is hoped that other banks will also commit to participating in the service during the coming months.

Has my bank implemented the Confirmation of Payee service?

Directed Banks:

Bank nameName checking outbound payments for customersResponding to other bank CoP requests
Bank of ScotlandYesYes
Barclays BankGradually rolling it out to all customersTBC
HSBCYes – Online banking payments only (branch by end of June)Yes
LloydsYesYes
Nat WestYes – Faster Payments only (CHAPS and branch by end June)TBC
NationwideYesYes
Royal Bank of ScotlandYes – Faster Payments only (CHAPS and branch by end June)TBC
SantanderGradually rolling it out to all customersTBC
Ulster BankGradually rolling it out to all customersTBC

Banks that have voluntarily adopted CoP:

Bank nameName checking outbound payments for customersResponding to other bank CoP requests
Starling BankGradually rolling it out to all customersYes
HalifaxYesYes
MonzoGradually rolling it out to all customersYes

The above is based on information provided by the banks or taken from public sources as at 30 June 2020 – the table will be updated based on available information.

What do I need to know about Confirmation of Payee?

Rather than reinventing the wheel, we’ll share how Barclays have briefed its customers:

What can I expect to happen the first time I pay someone via online banking?

When you are making the payment via online banking you’ll need to look at the response your bank gives you to when you type the beneficiaries name, sort code and account number.

The following summary describes the type of responses your bank might present on your payment screen:

What if sometimes I’m Robert, Bob, Rob, Bert or Rabbie?

In future, when you are paying someone new you will need more than just the person’s Sort Code and Account Number. You’ll also need their full name. Remember this is not necessarily the name you know them by, but rather the name that is recorded on their bank account.

You might know the person you are paying as Rabbie but does Rabbie’s bank know him as Robert, Bob, Rob, Bert or Rabbie?

The response you will receive will also be able to cope with making a payment to someone who has a joint account.

When you are making the payment via online banking you’ll need to look at the response your bank gives you to the name you type in.

If you receive a ‘partial’ or ‘no match’ response your best bet will be to stop making the payment and double check you are paying the right person.

If you ignore ‘partial’ and ‘no match’ responses from your bank and the money ends up in the wrong place (either due to fraud or mis-typing the numbers) you may be liable and not get your money back!

What about when people are paying me money?

When someone is paying you, make sure that you give them your full name (as recorded on your bank account) as well as your Sort Code and Account Number.

If you don’t do this you might find that payments you are expecting in the coming weeks are delayed.

Want to know more about the changing payments landscape?

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