The New Payment System Operator / NPSO – has announced it now has a new name and brand: Pay.UK.

Pay.UK’s remit includes working in the public interest to ensure that the systems the country relies on for its banking transactions are safe, open, innovative and resilient. Every day, individuals and businesses use the services we provide to get their salaries, pay their bills and make online and mobile banking payments. In 2017 we processed more than 8 billion transactions worth £6.7 trillion, through Bacs Direct Credit, Direct Debit, Faster Payments, cheques and Paym.

Paul Horlock, Chief Executive of Pay.UK said “Pay.UK puts the needs of consumers and businesses at the heart of everything it does, making sure that payments sent and received are done so safely, securely and efficiently. Our new name perfectly reflects this purpose, as well as showing exactly where our focus lies as we work to provide the foundation that the payments future of the UK is built on.”

Pay.UK has also released a set of new rules and standards for ‘Confirmation of Payee’ service aimed to help combat Authorised Push Payment fraud. The workings of a new ‘Confirmation of Payee’ service which can reduce the risk of payments being sent to the wrong account have been revealed.

Currently, the account name is not checked when sending an electronic payment – and fraudsters have become increasingly sophisticated in using this to trick people into sending money to the wrong account.

Confirmation of Payee can help prevent many fraudulent payments from being made in the first place, by introducing another hurdle for fraudsters and giving effective warnings to customers about the risks of sending to an account where the name did not match.

The preventative Confirmation of Payee safeguard is one of a package of measures being introduced across the industry, which also includes more help for customers if they fall victim to Authorised Push Payment (APP) fraud. Under a new ‘Contingent Reimbursement Model’ (1) industry code also being introduced in 2019, it is anticipated that any customer who has taken due care and received a positive name match through Confirmation of Payee will get greater protection from financial loss.

How Confirmation of Payee will work
When setting up a new payment, or amending an existing one, banks will be able to check the name on the account of the person or organisation you are paying. There are three possible outcomes:

Yes

If you used the correct account name, you will receive confirmation that the details match, and can proceed with the payment.

No, please check

If you used a similar name to the account holder, you will be provided with the actual name of the account holder to check. You can update the details and try again, or contact the intended recipient to check the details.

No, the name is wrong

If you have entered the wrong name for the account holder you will be told the details do not match and advised to contact the person or organisation you are trying to pay.

The matching decision is made by the intended recipient’s bank, as they have the best knowledge about the name of the person or business that is being checked. No matter what the outcome of the name check, the decision on whether to proceed with a payment will always rest with the sending customer – with the risks made clear if they choose to go ahead after receiving a non-match.

Banks, building societies, and other payment providers will be able to roll out Confirmation of Payee during 2019 as a way for their customers to check the name of who they are paying. This will reduce the risk of errors and certain types of fraud, such as ‘malicious redirection’ invoice scams where, by posing as a legitimate business known to customer, payers are convinced to redirect a payment to an account controlled by the fraudster.

There will still be some types of ‘malicious payee’ fraud that Confirmation of Payee cannot address – for example, so called ‘purchase scams’ where someone is tricked into paying in advance for goods that do not exist.

Paul Horlock, Chief Executive of Pay.UK, said “Sending a payment with an incorrect sort code or account number is like addressing a letter with the wrong post code. Even if you have used the correct name it won’t reach the intended destination – and fraudsters have become increasingly sophisticated in using this to trick people into sending money to the wrong account.”

“Confirmation of Payee will let you check you have the correct name for the person or business you’re paying, giving better protection against certain types of fraud, and helping to stop accidental mistakes too.”

As the organisation that runs the UK’s retail payment schemes, Pay.UK is responsible for setting the rules and standards that define how providers can implement the Confirmation of Payee service. These rules and standards will sit alongside guidelines that offer insights into how to meet users’ needs, in terms of language and customer experience.

The specifications and guidelines for Confirmation of Payee were refined and tested during recent stakeholder and consumer research carried out by an independent research agency on behalf of Pay.UK. The research report, Confirmation of Payee: Understanding consumer and stakeholder perspectives, found the service proposition was generally well received, with emphasis placed on the need for instant verification of results, consistency in messaging and functionality, clarity about liability and extra considerations for vulnerable groups.

Further engagement regarding the guidelines will be undertaken with potential participants during the rest of 2018 to support their implementation plans. The Payment Systems Regulator recently announced it will consult  on requiring Payment Service Providers (PSPs) to implement Confirmation of Payee in the first half of 2019.