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It’s a fair CoP: Confirmation of Payee explained

Confirmation of Payee technology will ensure electronic payments reach their intended recipients. This is how it works…

Confirmation of Payee (CoP) technology will automatically check that the name of the payee matches up with the account paid and alert the payer if it doesn’t – thereby reducing the risk of payments getting misdirected and providing greater security against fraud.

NatWest Group is pioneering the system in collaboration with the five other major UK banks. So what is CoP, how does it work, and what do you need to do to ensure your business benefits from this technology? Jane Barber, senior consultant, payments, has the answers.

What is Confirmation of Payee technology?

“CoP sends a message from the payer’s bank to the payee’s bank when a new payee is set up, or when the payee name on an existing payment mandate is changed. This checks the name of the person or organisation you give against the actual name on the account.”

Who’s behind it?

“Pay.UK, the retail payments body, is coordinating the development and delivery of the new service. 

“Separately, the Payment Systems Regulator has issued a mandate (called a specific direction) requiring the six major banks to fully implement CoP by 31 March 2020. Although this mandate only covers the big six, it’s anticipated smaller banks, building societies and other financial institutions will also introduce it as soon as possible.”

How does it work?

“When a new electronic payment is sent, a CoP check is carried out to ensure the name of the payee matches their sort code and account number. This brings three possible outcomes, all of which will ask you to confirm how you want to proceed.

“The three outcomes are as follows:

  1. The payee and account details match
  2. The payee name is wrong, and the payer is asked to contact the payee to check the name and account details
  3. The payee name is similar (ie Jon Smyth instead of John Smith) and the payer is shown the exact name on the account and asked to verify this is the intended payee”
Didn’t the banks always do this?

“No, previously, as long as the sort code and account number matched an account that existed somewhere, the payment would go through regardless of the name of the payee.”

So this should reduce fraud?

“Yes, it will reduce innocent mistakes and accidental payments into the wrong account, but more importantly it also gives greater security against authorised push payment (APP) fraud. This cost UK consumers £345m last year, of which only £83m was recovered.

CoP improves security against such fraud by reducing the opportunity for payee impersonation

Jane Barber
Senior consultant, payments, NatWest Group

“CoP improves security against such fraud by reducing the opportunity for payee impersonation. A system that flags up discrepancies between names and account numbers will help prevent individuals and businesses being scammed by someone purporting to be from a trusted organisation, such as a bank or the police. It will also be a more solid defence against CEO fraud, in which a scammer poses as a senior figure in the organisation and tricks a staff member into paying into the fraudster’s account.”

How can businesses prepare for CoP?

“In terms of payment set-up, the CoP checks will happen automatically. However, as a business you need to ensure the invoices you send out bear your correct company name and that this matches the name on your company business account. This might mean updating your stationery, website or other materials accessible to your clients. If you’re a sole trader or your organisation has different brands with different names, make your bank aware of this so the CoP check can verify your account.

“If you’re paying for goods or services, check that your supplier’s invoice includes a business name, and clarify the exact name of the payee company, particularly if it is part of a large organisation with multiple brand names.

“If you’re paying an individual, make sure you have their full first name and family name. If these don’t match their account (for instance, they may prefer to be known by their middle name), the CoP service will delay or prevent payment, so it’s advisable to clarify these details to minimise delays to legitimate transactions.”

What happens if you’re paying a person or organisation whose bank isn’t the big six and may not have implemented CoP?

“You'll need to make sure you have the right account details, and if you have any doubts, send a small amount first and check that the person or organisation has received it, before you send the full amount.”

So does this apply to all payments?

“CoP applies to UK-based accounts and payments made via the Faster Payments System (FPS) or CHAPS (high-value payments). It doesn’t yet apply to direct debits, Bacs Direct Credits or batch/bulk payments, but these are expected to be introduced at a later date.”

What else can customers do with regards to payments?

“Remain vigilant, and double-check every new payee and any changes to payment details. CoP will be an effective tool, but humans are the greatest weapon in the fight against fraud. Even CoP checks that match won’t allow a payment until a human authorises it, so ensure you and your staff take every action possible to protect yourself against fraud.”

More information

This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of the NatWest Group Economics Department, as of this date and are subject to change without notice.

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