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The UK's Payment Systems Regulator (PSR) is extending the Confirmation of Payee (CoP) scheme, which means around 400 more financial firms will be required to introduce the payment protection measure.
CoP is the name-checking service designed to prevent accidentally misdirected payments and authorised push payment (APP) scams. One million payments benefit from the checking service every day.
The fraud protection service will increase coverage from 92 percent of transactions made via Faster Payments (FPS) and CHAPS to 99 percent, which is worth approximately £2.5trn.
“Protecting people who make payments should be a top priority for all financial firms,” said Genevieve Marjoribanks, head of policy at the PSR, adding that those who have not yet introduced CoP need to step up to make sure their customers are protected.
She continued: “All consumers should expect to see Confirmation of Payee checks happening when they make payments, regardless of who they use to make the transfer. That’s why these plans to increase coverage are so important."
The PSR consultation on more adoption of CoP in the UK market is warmly welcomed, commented Ed Adshead-Grant, payments director at Bottomline Technologies.
“APP fraud scams continue to plague both businesses and the consumer to record levels. It was time for the industry to step up and ensure this extra layer of security becomes easily accessed,” he continued, stating that it is only the fraudster that loses from this new mandate.
The new mandates are almost universally welcomed across the industry, he told VIXIO.
“The APP scams continue to rise and more had to be done to help consumers and businesses. We are ready to help all our clients and all those named by the regulator to bring this extra layer of protection and confidence to their customers.”
In 2019, the PSR directed the UK’s six biggest banking groups to implement the system. Since then, additional non-directed firms have voluntarily implemented the service and there are now 33 financial organisations offering CoP.
Earlier this year, the PSR expressed interest in extending the scheme when the regulator directed the transition to a new technical environment, opening the availability of the service to more financial firms.
Now, the PSR is consulting on how to enact this, suggesting that the CoP rollout is undertaken in two stages.
The first group of firms to come into scope will be prioritised based on the complexity and size of the institution and/or firms where the adoption of CoP could have the biggest impact in preventing APP scams. This grouping will have until June 30, 2023 to have made the change.
Meanwhile, a second group including all other firms which use either unique sort codes or that are building societies using a Secondary Reference Data (SRD) reference type would need to have implemented CoP by June 30, 2024.
Stakeholders have until July 8 to respond to the consultation and the PSR has confirmed that it will set out its final position later in the year.
Pay.UK
As well as changes to CoP, the PSR has also announced that it is making changes to its Specific Direction 11, a regulatory requirement for Pay.UK to ensure the closure of the Phase 1 technical environment, which was used to enact CoP in 2019.
The PSR has extended the deadline for Pay.UK to June 30 this year, from May 31.
This change has happened as some Phase 1 participants have experienced technical issues with their migration to the Phase 2 technical environment, the PSR explained.
This has delayed their preparedness to provide CoP in the Phase 2 environment before Phase 1 was formally decommissioned on May 31, 2022.
The PSR has allowed the short extension to the operation so that firms can undertake the necessary work to complete their migration to Phase 2.
