Exploring the Boundaries of Confirmation of Payee: TechnoXander

Scope and Reach of Confirmation of Payee (CoP)

1. CoP’s Core Applications:

• Faster Payments: CoP plays a critical role by verifying the payee’s name during payment initiation, ensuring accuracy and preventing misdirected transfers.
• Internal Transfers: CoP also applies within institutions, safeguarding intra-bank transfers with enhanced attention.
• Bacs Direct Credit: Although currently focused on Faster Payments and CHAPS, there’s regulatory encouragement to extend CoP into the Bacs system, given its flexible integration possibilities.
• Direct Debit Payments: CoP’s remit now includes a “Confirmation of Payer” feature for added security in Direct Debit transactions.
• Open Banking (PISP): Payment Initiation Service Providers are integrating CoP during transaction requests via Open Banking, boosting accuracy and trust in the process.

2. Types of Accounts Covered:

CoP applies to both personal and business accounts in the UK, recognized through either a sort code and account number, or these combined with secondary reference data – offering robust verification across account types.

3. Transactions Outside CoP’s Scope:

• Cheques: Traditional cheque-based transactions lie outside CoP’s coverage.
• Cash Payments: Physical cash exchanges are not within CoP’s digital verification framework.
• Card-Based Transactions: Payments via debit or credit cards (swipe or chip) fall outside of CoP’s verification domain.

4. Looking Ahead:

• By October 2024, CoP is expected to extend protection to an additional 400 financial institutions, per the Payment Systems Regulator.
• Moreover, expansion to include corporate and aggregator access is on the horizon, broadening CoP’s applicability across more organizational layers.

Read in Detail, please visit original post at Unveiling Confirmation of Payee- Exploring the Boundaries: Understanding the Scope of Confirmation of Payee Payments