Confirmation of Payee (CoP)

Confirmation of Payee (CoP) is a critical, regulatory-mandated account name-checking service designed to reduce misdirected payments and improve transaction security for UK domestic payments. By verifying that the recipient’s account details match the intended beneficiary’s name, CoP helps prevent errors and fraud, ensuring that payments reach the correct account.

What is Confirmation of Payee

CoP is an API-based, peer-to-peer service that verifies the account name associated with a sort code and account number before a payment is initiated or collected. Unlike traditional verification systems, CoP does not rely on a central infrastructure; instead, it leverages direct interactions between banks and payment service providers. Key points include:

• Account name-checking service: Confirms that the name provided by the payer matches the name registered with the account.

• Reduction in misdirected payments: By verifying recipient details, CoP minimizes the risk of sending money to an incorrect account.

• Widespread adoption: Since its launch in 2020, over 140 organisations have implemented CoP, with more than 1.9 million checks performed daily.

How does Confirmation of Payee work

The CoP process is straightforward yet robust, involving two main roles: the Requester and the Responder.

The two roles in CoP

• Requester:

  • This is typically the bank or payment service provider initiating the payment.

  • Before funds are transferred, the Requester sends an API-based request to verify that the account name provided by the payer matches the records associated with the account number and sort code.

  • This step is critical for ensuring that money is not sent to the wrong person.

• Responder:

  • The Responder is the bank or account holder’s provider that actually holds the account.

  • Upon receiving a CoP request, the Responder checks their records and returns a response indicating whether the provided name matches the account details.

  • The response is typically a simple “yes” (a match) or “no” (no match), enabling the Requester to decide whether to proceed with the payment.

Process flow

1. Initiation:
   When a user initiates a payment via the banking application, the system automatically triggers a CoP check as part of the transaction process.

2. Verification request:
   The Requester sends a CoP API request to the Responder, including the recipient’s account details and the provided account name.

3. Response:
   The Responder validates the details and returns a confirmation response:

   • Match: The recipient’s details are correct, and the payment can proceed

   • No match: The user is notified that the recipient’s details do not match and is given the option to verify or correct the details or proceed with the payment at their own discretion.

   • Partial match: The user is informed that the recipient’s details partially match and is given the option to proceed or review the details.

4. Transaction completion:
   If the user confirms the payment, the transaction continues securely, ensuring that funds are transferred to the intended account.

Why we implement Confirmation of Payee

UK payment regulations now require a validation check for both Faster Payments (FPS) and CHAPS transactions. This mandatory measure is in place to:

• Enhance payment accuracy: Ensures that the account number and recipient’s name are correct before funds are transferred.

• Reduce fraud and error: Provides a safeguard against misdirected payments and helps protect both payers and recipients.

• Meet regulatory deadlines: The Payment Systems Regulator (PSR) mandates that Group 1 Payment Service Providers (PSPs) implement CoP by October 2023, while Group 2 PSPs – which include many Crassula clients – must implement it by October 2024.

The implementation of CoP not only complies with legal requirements but also meets customer expectations for secure and reliable payments. Stay tuned for more detail on CoP implementation!