Confirmation of Payee 101

Updated: 21 March 2020

What is Confirmation of Payee?

Confirmation of Payee (CoP) is an account name checking service that the UK banks will be introducing to online banking payments. The service was finally due to go live by the end of March 2020, however given that the directed banks are managing COVID-19 related risks and are working hard to protect their customers, the regulator (Payment Systems Regulator – PSR) has considered their regulatory approach to the implementation of this system.

Some banks such as Bank of Scotland have already implemented their Confirmation of Payee service and others may follow ahead of the March deadline.

However, the PSR have informed the directed banks that if they are unable to fully implement CoP by 31 March:

  • Banks must take appropriate steps to roll out CoP by 30 June 2020, taking into account the impacts of COVID-19, even if that means they do not meet the original 31 March 2020 deadline.
  • The PSR expect the directed banks to ensure customers who would have benefitted from the protections of CoP are not otherwise disadvantaged from any COVID-19 related delay, including refunding victims of fraud if CoP would have prevented it from happening.
  • The PSR will keep these arrangements under review as the wider impacts of COVID-19 are better understood.
  • The PSR are stating that where the directed banks provide appropriate protection to people, we will not take any formal action in respect of delays to the introduction of CoP.
  • The PSR fully expect the banks to do everything they can to protect people in the meantime and implement CoP by 30 June 2020.

The Confirmation of Payee service is intended 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 will also help 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.

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

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.

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 finally 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.

Bank of Scotland announced that it had placed its Confirmation of Payee service live on the 2 March 2020. It is believed that they were the first bank in the UK to offer this service to its customers and the roll out schedule by the other banks has yet to be confirmed.

All these banking groups have been directed, by the regulator, to introduce the Confirmation of Payee service. However, it is expected that other institutions will also introduce this account name checking service in the coming months.

Starling Bank have already chosen to voluntarily participate in the Confirmation of Payee service and it is hoped that other banks will also join the service in the coming months.

However, given that the directed banks are managing COVID-19 related risks and are working hard to protect their customers, the regulator (the Payment Systems Regulator (PSR)) has considered their regulatory approach to the implementation of this system. The PSR have advised banks that they must take appropriate steps to roll out CoP by 30 June 2020, taking into account the impacts of COVID-19, even if that means they do not meet the original 31 March 2020 deadline. Note: This is explained more fully above in ‘What is Conformation of Payee.

Note: This page will be updated to reflect other directed banks that have placed the CoP service live or voluntarily join the service (if you spot a bank that we have missed or see an error in this article please let us know).

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.

International payments (cross border transfers) and cheque payments are also not part of the payment mechanisms in scope of the Confirmation of Payee service.

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 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 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.

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

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 Confirmation of Payee?

If you want to know more about the UK’s new name checking service or want to suggest additional information / clarify something – please ask a question in the comments section below.

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