Confirmation of Payee (CoP)

Confirmation of Payee (CoP)

Alice Foley
by Alice Foley

In May 2023, the Home Secretary Suella Braverman presented to Parliament finding that 1 in 15 adults were victims of fraud in 2022. While the exact figures are unknown and difficult to determine, it’s predicted by Peters & Peters and Crowe that British individuals are losing approximately £8.3 billion per year to fraud.

Background to Confirmation of Payee

In 2019, the Payment Systems Regulator (PSR) implemented the first mandate for Confirmation of Payee to tackle the rise in fraud and money lost on misdirected payments. This type of scam is called Authorised Push Payment fraud (APP) which is an instance where a victim is tricked into transferring money into a fraudsters account. This type of fraud happens when a scammer uses impersonation to deceive someone to transfer money or make a payment to the fraudsters account using the account number and sort code.

Understanding the mandate

Confirmation of Payee is an account name checking service which verifies the payee name to the account number and sort code that the payer inputs when completing a transaction. In an effort to reduce APP fraud and accidental misdirected payments, the PSR initially instructed under Specific Direction 10 (SD10) the UK’s six biggest banks to introduce a Confirmation of Payee tool by 2020. SD10 required the banks to set up a CoP tool to send and respond to CoP requests.

Following the success of the initial mandate, the PSR extended this to SD17 to include the remaining PSPs whose customers can make or receive payments. These PSPs were grouped into two based on size with the initial mandate deadline for Group 1 implementation being 31st of October 2023. During this time, several challenger banks such as Revolut and Monzo recognised the importance of CoP in preventing APP fraud and volunteered to implement a CoP tool.

SD17 instructed the remaining financial institutions, Group 2 which includes the remaining banks and Building Societies to implement their own CoP tool. The PSR have set the 31st of October 2024 as the deadline for Group 2 to implement Confirmation of Payee.

What is Confirmation of Payee

Prior to CoP, scammers easily misled victims to transfer money by providing incorrect account numbers and sort codes during bank transfers. However, CoP requires PSPs to add an account name verification step which makes APP scams more challenging.

Confirmation of Payee is an account name verification step added to the transfer of money process. CoP is designed to reduce accidental misdirected payments, APP scams and provides customers with comfort that payments are sent and collected from the intended account holder in the UK.

Since successfully launching in 2020, customers now expect account name verification when setting up a new payee who they have never paid before. Pay.UK reported that there are more than 85 organisations who have successfully implemented CoP with over 1.7 million CoP checks carried out daily.

How Confirmation of Payee works

When completing a bank transfer, the payer will input the account number, sort code and account name of the payee. The image below illustrates the outcomes following the implementation of CoP:


Benefits of CoP

Confirmation of Payee is a regulatory driven initiative however, it brings with it a range of benefits for banks, building societies and customers. These benefits include:


As we get closer to the deadline and CoP becomes industry standard, it has become increasingly important for Building Societies to participate in Confirmation of Payee.

Now the focus must be on successful implementation of the CoP tool to protect customers and reduce APP fraud. Financial institutions who have already implemented CoP have done so by building a tool in-house or through a third party. There are a variety of fintech’s and third-party firms who can support efficient and cost-effective solutions to implement CoP for Building Societies.

Join Woodhurst, Consectus & OBConnect on 6th November for a discussion on the nuances of CoP implementation tailored specifically for Building Societies.

The webinar offers an informal and open platform for dialogue, providing Building Societies with valuable insights into CoP implementation strategies. Join us as we discuss the roadmap for CoP implementation, challenges of requirements, generic API provision and governance guidance to ensure participants are prepared for 31st of October 2024 deadline.

The Do’s and Don’ts of Implementing CoP for Building Societies, registration can be found at the following link here.

OBConnect and Consectus have partnered up with the shared vision on CoP ‘To allow building societies to connect and adhere to Confirmation of Payee compliance, easier, simpler and most cost effective.’

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