PSR issues direction for CoP transition to a single technical environment

The Payment Systems Regulator (PSR) issued a direction in February 2022 to move Confirmation of Payee (CoP) to a single technical environment, a step it describes as phase 2 of the service's rollout¹. The direction is intended to allow more banks to offer CoP¹.

CoP lets banks check the name on a new payee's account as well as the sort code and account number. Alerts tell the payer whether there has been a match, a close match or no match, so corrections can be made before the payment is sent. The service is designed to prevent misdirected payments as well as fraudulent ones¹.

The regulator's earlier direction, Specific Direction 10, was given to members of the UK's six largest banking groups in August 2019, requiring them to implement CoP by the end of March 2020. The payment service providers (PSPs) subject to that direction are involved in around 90% of Faster Payments (FPS) and CHAPS transactions¹. In July 2020, the PSR confirmed that the directed PSPs had achieved widespread implementation of CoP, with certain agreed exemptions¹.

Following a May 2022 consultation, the PSR also directed around 400 more financial firms to provide CoP¹. It says this will see nearly all transactions made via Faster Payments and CHAPS covered by CoP by October 2024¹.

The deadlines differ by group of firm:

The PSR says firms fall into Group 2 if they have their own unique sort code, are a building society, send funds for their customers over CHAPS or FPS, and have accounts that consumers and businesses can make and receive payments from¹. It has published a non-exhaustive list of the PSPs that were on the Extended Industry Sort Code Directory (EISCD) at the beginning of 2022 as a starting point for firms working out whether they are covered¹.

Why it matters for households

CoP is the check that runs when someone sets up a new payee or changes the details of an existing one. Under the service, the payer is told whether the name they entered matches the name on the account they intend to pay, or is a close match, or does not match at all, so a mistake can be spotted before money leaves the account¹.

The practical effect of the February 2022 direction and the later extension is that more accounts held with UK banks and building societies come within the service. The PSR says the firms it directed in 2022, around 400 of them, had to be covered, and that nearly all Faster Payments and CHAPS transactions would be covered by October 2024¹. Faster Payments is the system most everyday bank transfers use, so the change reaches ordinary personal and business payments rather than only large or specialist ones.

The deadlines are staggered. Firms named as Group 1 PSPs in Direction 17 had to implement CoP by 31 October 2023, while Group 2 PSPs have until 31 October 2024¹. Until a firm's deadline passes, payments made through it may not carry the name check.

What happens next

The PSR's published dates are 31 October 2023 for the Group 1 PSPs listed in Direction 17 and 31 October 2024 for Group 2 PSPs¹. The regulator has not reported any further deadline beyond those in the material it has published on the transition to a single technical environment¹.