PS22/3 Extending Confirmation of Payee coverage

APP scams and accidentally misdirected payments can cause significant harm to consumers. Confirmation of Payee (CoP) is a service that aims to prevent certain types of scams and misdirected payments from happening. We want everyone to have the same levels of protection and confidence when making payments.

Why we are publishing this document

We want payments to work safely and securely for consumers. For this reason, we have consistently considered the widespread adoption of CoP in UK payments to be a key priority and consulted on further measures that would see around 400 new firms providing this service to their customers. There are currently more than one million CoP requests every day and we want to make it more widely available to other financial institutions and their customers.

We are directing around 400 payment service providers (PSPs), to implement a system to offer the CoP name checking service to their customers (both as payers and payees). This will help to reduce authorised push payment (APP) fraud and accidentally misdirected payments. This is a continuation of the journey we started in August 2019, when we issued Specific Direction 10 (SD10) to require the six largest banking groups to implement CoP. The new direction represents our ambition to achieve near ubiquity of CoP and protect a greater number of payment system users.

We believe that providing this service to consumers, regardless of who they make a transaction with, should be a priority for all firms, which is why we are giving this direction. This is particularly important as the number of APP scams has continued to rise.  

We have 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. 

We have prioritised Group 1 because of the capabilities 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, we will increase CoP coverage from 92% of Faster Payments transactions to 99%. 

What this document contains

This document contains summaries of the responses to our consultation, along with our views, our cost benefit analysis and two annexes showing the names of the Group 1 firms and our new Specific Direction 17: Expanding Confirmation of Payee. 

Who should read this document

This document is relevant to the payments industry, consumer groups and PSPs, particularly those already involved in our work on APP scams.

What happens next

We will give 12 months to Group 1 to implement CoP and 24 months to Group 2 to implement CoP. This will give industry time to plan and coordinate delivery more effectively, especially to avoid bottlenecks, and allow Pay.UK to make the necessary changes to the CoP rules and standards in relation to a vendor model and/or indirect access model.

This means we will require:

• Group 1: PSPs named in Annex 1 to have and use a CoP system with send and respond capability after 31 October 2023.
• Group 2: all other PSPs either using unique sort codes, or that are building societies using a SRD reference type, to have and use a CoP system with send and respond capability after 31 October 2024.