Specific Direction 11 issued for second phase of Confirmation of Payee

The Payment Systems Regulator (PSR) confirmed and published a new rule requiring the technical and system requirements for the second phase of Confirmation of Payee to be implemented by 31 May 2022, doing so by issuing Specific Direction 11 (SD11)¹.

The direction was issued in February 2022, according to the PSR's own account of its work on authorised push payment (APP) scams¹. The regulator said the rule was intended to ensure the second phase of the name-checking service was delivered to a fixed timetable.

The second phase concerns moving CoP to a single technical environment, which the PSR said in October 2021 was intended to extend the benefits of the service to account types that do not use unique sort codes and account numbers, instead using secondary reference data, such as building societies using roll numbers¹.

The timetable was subsequently varied. In May 2022 the PSR announced plans for around 400 more financial firms to provide CoP, and varied SD11 (SD11a), requiring Pay.UK to ensure the closure of the Phase 1 technical environment by 30 June 2022 rather than 31 May 2022¹.

The PSR's history sets out earlier CoP milestones. It issued Specific Direction 10 in August 2019, directing members of the UK's six largest banking groups to fully implement CoP by 31 March 2020¹. In March 2020, in light of COVID-19, the PSR announced forbearance under SD10, allowing directed payment service providers to delay implementation up to 30 June, provided they continued to take appropriate steps and ensured APP scam victims were not disadvantaged by any delay¹. On 1 July 2020 the PSR confirmed widespread coverage of CoP across the directed parties under SD10¹.

In October 2022 the PSR directed around 400 more financial firms to provide CoP, which it said would see nearly all transactions made via Faster Payments and CHAPS covered by CoP by October 2024¹.

Why it matters for households

Confirmation of Payee is the name-checking service that warns a payer when the name they give does not match the account they are paying. SD11 set the deadline of 31 May 2022 for the technical and system requirements of the second phase, which was aimed at extending the service beyond accounts identified by sort code and account number to those using secondary reference data, such as building society roll numbers¹. That deadline was later moved: SD11a required Pay.UK to close the Phase 1 technical environment by 30 June 2022 instead¹.

The wider direction of travel affects who is covered. The PSR said its October 2022 direction to around 400 more firms would see nearly all Faster Payments and CHAPS transactions covered by CoP by October 2024¹. The PSR has not reported in this account what the second phase means in practice for individual customers of the firms concerned, and no consumer-facing changes to CoP checks are set out in the material.

What happens next

The PSR's history records the later steps in its APP scams work rather than any further CoP phase 2 milestones. It directed 14 of the largest UK payment service provider groups to collect and provide data on their APP scam performance in March 2023¹. In December 2023 it set out the final detailed parameters of its reimbursement requirement and confirmed a policy start date of 7 October 2024¹. The reimbursement requirements came into force on that date¹.