Confirmation of Payee Expansion Represents Crucial Step Forward in UK Banking

Banking And Financial Messaging


Erez Nounou

Mar 21, 2024

The UK banking landscape is poised for a significant transformation as the Confirmation of Payee (CoP) system is set to expand, with further reductions of Authorized Push Payment (APP) fraud in its sights.

As the participation in CoP significantly scales this year to more than 400 PSPs overall, Pay.UK’s appropriately named ‘CoP Expansion Project’ introduces two key changes to help them manage it. The first of these changes is the expansion of eligibility for organisations to join the CoP service (no longer limited to account holding PSPs). The second change is the creation of additional technical models for organisations to join (creating an Aggregator model to work alongside the existing Direct Model). Both of these changes, as well as the new directory service, represent a dramatic altering of the roadmap in a very short period of time before the PSR Group 2 deadline. 

In light of the tight timelines for Group 2 onboarding, Pay.UK is urging organisations to prepare in the best way possible to onboard in a streamlined way. Organisations can do this is by frontloading some of the work to onboard before the 8thSeptember go-live date for the Aggregator model. Whilst technical onboarding cannot commence, business readiness operations and other paperwork can be put in place. Pay.UK is also urging organisations to reach out to them as soon as possible to help plan the testing and preparedness for onboarding.

Key Timelines 

·       Now – PSPs should reach out to PSR for clarification on eligibility for deadline extensions and exemptions

·       End of March 2024 – Final service documentation released by Pay.UK, including technical guide and legal framework

·       April 2024 – Open applications to Pay.UK for PSPs and aggregators to join new directory

·       June 2024 – All existing customers to complete re-contracting under the new legal framework

·       August 2024 – Pay.UK start controlled industry testing of new directory for existing participants

·       September 2024 – CoP directory switchover completed by all existing customers on 8th September. New CoP customers can start to go live from 9th September. switchover to new directory

·       31st October 2024 – PSR Mandate deadline for Group 2 PSPs. 

These changes underscore the industry's need to adapt swiftly to meet the approaching deadline, highlighting the importance of early and thorough preparation, including 'live' testing. As Anuradha Raman, Product Owner for CoP at Pay.UK stated in our recent webinar; Confirmation of Payee- Countdown to October 2024, expanding CoP will be a collaborative effort. It will include extending eligibility beyond traditional account-holding PSPs, which is a strategic move towards a more inclusive banking environment. This shift is crucial for leveraging technology solutions and broadening the network of secure payment services.

“Confirmation of payee is changing,” Anuradha said. “It's widening to ensure that we are able to reach a wider payments audience, but also ensuring other payment types could benefit from it. This is a result of the widespread adoption of CoP, and is in response to industry and regulatory demand to do more to fight against fraud.”

Webinar onboarding poll results:

Q: What stage are you at with your CoP project?

A.     Not started - I don’t know where to start = 5.6%

B.     Not started - It’s currently behind other priorities = 2.8%

C.     Registered with Pay.UK, vendor not yet selected = 19.4%

D.    Registered with Pay.UK, vendor selected = 19.4%

E.     Project in-flight = 47.2%

F.     Solution is live or in test = 5.8%


It is fantastic to see that 53% of PSPs surveyed during the webinar have projects in-flight or are live/in test for the CoP Group 2 deadline. This shows that those Financial Institutions understand the value of early testing. However, the 5.6% who don’t know where to start should first check their email, as Pay.UK has sent out a plethora of best practice guidelines. In fact, Anuradha from Pay.UK said “Nearly 250 organisations still haven't reached out to register and 50 have had no contact with us whatsoever” which highlights the need for these organisations to begin the onboarding process as soon as possible.

The tight upcoming deadlines, combined with the introduction of new models and directory services, requires the 2.8% of PSPs who have not prioritised CoP in their roadmaps to stay informed, proactive, and engaged with Pay.UK and service providers like Bottomline for support and guidance. Otherwise, they risk missing the 31 October 2024 deadline and risk regulatory penalties, losing customer loyalty and brand credibility. 

The last note of caution is to the PSPs that are relying on being approved for exemptions and extensions from the PSR. These are granted on a case-by-case basis and so no assumptions should be made that their requests will be approved. In fact, arguably to grant exemptions is at cross-purposes with the mission of CoP, which is to increase the coverage of financial institutions leveraging CoP and continue to reduce APP fraud (17% reduction in 2023). This is the same case for providing extensions. To date, the PSR have remained firm around that October 31st 2024 deadline.

Beyond meeting regulatory requirements, the CoP system promises substantial benefits for PSPs and their customers. These include enhanced customer experience, reduced fraud, operational efficiency, and potentially higher brand recognition. As the CoP system evolves, its scope continues to widen, incorporating feedback from PSPs, regulators, and end-users. The focus remains not just on expanding coverage but also enhancing the system's capabilities to address emerging challenges and opportunities in the banking sector. With the combined efforts of all stakeholders, the CoP system is set to become an integral part of the UK's financial infrastructure, significantly reducing payment fraud, and improving the security and reliability of electronic payments.

The upcoming changes to the CoP system mark a pivotal moment in the UK's banking history. As the deadline approaches, it is imperative for PSPs to actively engage in the expansion process, leveraging the support and resources provided by Pay.UK, Bottomline, and the PSR. Through collaborative efforts and adherence to best practices, the banking community can achieve a safer, more secure payment environment, benefiting both providers and customers alike.

Click here to watch the webinar in full


Related topics

Confirmation Of Payee

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Erez Nounou

Erez Nounou specialises in fraud and financial crime services for Banks and FIs. He is the product lead for Bottomline’s Confirmation of Payee solution.
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