The PSR directs up to 400 firms to introduce the payment protection measure, Confirmation of Payee
Today, the Payment Systems Regulator (PSR) has confirmed its plans that will see around 400 more financial firms provide the name checking service, Confirmation of Payee (CoP).
CoP is an essential fraud protection measure. Today’s direction will see nearly all transactions made via Faster Payments (FPS) and CHAPS covered by CoP by October 2024.
The CoP service is designed to prevent accidentally misdirected payments and APP scams by checking the name of the account holder with the account number and sort code. There are currently one million payments which benefit from the checking service every day.
This latest requirement from the PSR follows a direction the regulator gave in 2019 which saw the UK’s six biggest banking groups implement the system. Since then, additional non-directed firms have voluntarily implemented the service and there are now 59 financial organisations offering CoP.
The regulator is keen for CoP to be widely implemented by financial firms that send and receive payments. The PSR thinks providing this service to consumers, regardless of who they make a transaction with, should be a priority for all firms, which is why it is giving this direction. This is particularly important as the number of APP scams has continued to rise.
The PSR has identified two groups of firms which need to implement the system and has set out requirements for each:
- Group 1: focuses on firms that will need to use the CoP system after 31 October 2023.
- Group 2: All other firms that use unique sort codes, or are building societies using alternative reference information, to use the CoP systems after 31 October 2024.
The PSR has prioritised Group 1 because of the capabilities and size of the financial firms, and because adopting CoP quickly in these firms is likely to have a greater immediate impact on preventing APP scams overall. By prioritising this group, the PSR will increase CoP coverage from 92% of Faster Payments transactions to 99% after October 2023.
Kate Fitzgerald, Head of Policy at the PSR said: “This direction is another big step in protecting people from the devastation that APP scams can inflict on people.
“Financial firms have to act to prevent fraud and CoP is one of the many tools that can be used. By giving this direction, we will see more widespread adoption of the protections available to people making payments.”
The PSR will monitor how firms implement the system and will step in where necessary.