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New Zealand’s retail banks will begin rolling out the new "Confirmation of Payee" service by the end of November, according to an announcement from the New Zealand Banking Association (NZBA).
The trade association has said that the new service will be delivered via a phased approach to customers, to allow for proper testing and to ensure customer satisfaction.
The service is designed to give bank customers an added layer of protection when making domestic payments between bank accounts and will enable users to verify that the account name matches the account number before finalising a payment.
This real-time check will provide a "match", "partial match" or "no match" notification based on bank records. If the payee's bank doesn’t yet support the service, the payer will receive a message stating, "cannot check payee details".
The CoP service will use secure, encrypted software to compare the account holder's name entered by the payer with the recipient bank's records, and no account information is stored after the process, the NZBA said.
Who will use it?
Starting from the end of November 2024, the service will be available for personal online and mobile banking payments to New Zealand-based accounts, and it will later be extended to business banking platforms.
In a statement to Vixio, NZBA CEO Roger Beaumont also remained open minded about payments and e-money firms that operate in the country being able to use the CoP service.
“Last year New Zealand’s retail banks committed to bring in Confirmation of Payee. While this initiative is led by the banking industry, it has been designed to allow non-banks to participate in future,” he said.
Beaumont continued that before that happens, banks will need to ensure the service is working well and meeting its customers’ needs.
He also said that the service will run in a similar way to the UK’s CoP model.
“The 'Confirmation of Payee' service will run only when the payer is setting up a new account to pay, making a one-off payment, or editing an existing account to pay online, and it only applies to domestic payments from one bank account to another,” he said.
“If payees are already saved in your online or mobile banking app, they will not be checked by the Confirmation of Payee service unless you edit the saved payee. We suggest before making a payment that you check the account details are correct and take a moment to consider if you trust the person you’re paying.”
Welcoming the new initiative, Beaumont said in a media statement that banks have been working together at pace to start making the service available before the end of the year.
Due to the size and complexity of payments services that the banks offer, he said that some banks are adopting a phased approach to ensure thorough user testing and customer understanding.
“The technology build and integration of the new service differs across banks, so it’s unsurprising that each bank’s testing and delivery phase looks slightly different,” he said. “It’s crucial that all banks gain assurance the system is working as it should, across their online and mobile banking platforms and services, before rolling it out broadly.”
According to Beaumont, this will ensure a smooth implementation, particularly in New Zealand, where many consumers have more than one bank account.
“For customers, this means Confirmation of Payee might not be available across all online banking platforms simultaneously,” he said, adding that they might find that a CoP check is available from some banks and not others.
“Alternatively it might be available on your desktop banking platform but not your mobile app, or vice versa.
“The good news is that banks are working to have the service available across all online personal banking channels by Easter 2025,” he said.
“As a bank customer, you can expect to hear more from your bank about [its] approach and timing for introducing the new service.”
Banks participating in the new Confirmation of Payee service include the main banks operating across the country, including ANZ, ASB, Bank of China, BNZ, CCB, The Co-operative Bank, Heartland Bank, ICBC, Kiwibank, Rabobank, SBS Bank, TSB and Westpac.
This is just one of many initiatives by the banking industry in New Zealand to tackle payments fraud.
For example, banks operating in the country are also increasing efforts to combat scams through initiatives such as supporting an anti-scam centre to target mule accounts, removing hyperlinks from customer texts, and raising public awareness about scams.
Further, the NZBA has echoed counterparts in the UK, EU and neighbouring Australia by stressing the need for telecoms, social media platforms and the government to play a bigger role in tackling payments fraud.
