Confirmation of Payee:
Time for Financial Institutions to Comply

There are no rules for Building Societies to opt-out. The most a Building Society can do is opt-out of outbound validations for their customers (if they can only send money to a nominated single, sometimes called a linked account).

In the UK, APP fraud accounted for losses totaling £479m in 2020 (Source: UK Finance), as payment scams increasingly moved online. However, only 25% of losses are ever recovered which highlights the urgency around implementing stronger preventative measures. CoP aims to minimise APP fraud and reduce the volume of payments that don’t reach the intended destination.

Organisations can only opt-out if they prove they have no customers or have nominated/ linked accounts. Any opt-out requests must be submitted to Payment Systems Regulator (PSR) for consideration. A Bank, etc., cannot simply assume their opt-out status.

The rule is whenever a new beneficiary is set up. However, we see some Banks re-validating after a period of x days, but this is their choice and not in the rules.

CoP uses Head Office Collections Account (HOCA), i.e., your central account and Secondary Reference Data (SDR). For Building Societies, this is a roll number. For Credit Cards, it is a PAN number, and for Mortgages, FX providers, etc., it may be a customer reference.

In short, whoever is registered at Companies House. This can vary by Bank, Building Society, etc. It’s worth validating/ double-checking that those noted have up-to-date details, as incorrect information has caused delays in some implementations.

We look for a daily file. Although, we have clients with more than one file per day. The intra-day RESTAPI takes 1.5 seconds to update.

In an Open Banking transaction, the customer consents to send a payment. This PISP (Payment Initiation Service Provider) payments are outside CoP requirements.

Pay.UK issues a rule book for the matching engine. Anyone can build their solution provided they follow this rule book and get certified against the simulator. They will also need to consider hardware costs, response dates, system availability, etc., in any self-build. The other value is that the rulebook needs to be followed to the letter by all parties. Some of the earlier parties are not yet doing this, and the vendors in the market compensate for these differences - that said, any self-build solution could go through the same exploration as the vendors encountered.